US Dollar firmer, targets 90.00
- USD bid near 90.00.
- US trade deficit up in December.
- Bullard said inflation fears behind market rout.
The US Dollar Index (DXY) is extending the positive momentum this week, now testing fresh multi-day peaks in levels just below the critical 90.00 limestone.
US Dollar in 2-week tops
The index, which gauges the buck vs. its main competitors, is up for the third session in a row on Tuesday, adding to recent post-payrolls gains in the boundaries of the psychological handle at 90.00 the figure.
The upside momentum around the buck found extra oxygen in response to a pick up in inflation fears, particularly sparked after US labour market figures showed a solid increase in ‘wage inflation’ during January.
The up move in USD comes along with a rebound in yields of the US 10-year benchmark, recovering the 2.78% handle after dropping to 2.65% during early trade.
In the US data space, December’s trade deficit rose to $53.1 billion, surpassing prior surveys and November’s reading ($50.4 billion).
In addition, St. Louis Fed J.Bullard said part of the current market rout has been fuelled by inflation fears, adding that inflation expectations have grown albeit remain a bit low.
US Dollar relevant levels
As of writing the index is gaining 0.26% at 89.92 and a break above 90.03 (high Feb.6) would target 90.70 (high Jan.22) en route to 90.98 (high Jan.18). On the other hand, the immediate support is located at 88.55 (low Feb.2) seconded by 88.42 (2018 low Jan.25) and finally 86.60 (weekly trend line off 72.70).