DXY firmer, approaching 94.00 ahead of NFP

The US Dollar Index – which tracks the buck vs. its main rival currencies – has resumed the upside and is flirting with the 94.00 neighbourhood ahead of key US data releases.

US Dollar looks to Fedspeak, payrolls

The index is advancing for the second straight session so far on Friday, trading in levels last seen in mid-August around the 94.00 area and always underpinned by the upside momentum surrounding US yields.

In fact, yields of the US 10-year benchmark moved higher beyond the 2.36% level earlier in the session, up more than 6 bp since weekly lows around 2.30% seen on Tuesday.

The continuation of the sharp sell-off around EUR/USD, optimism over the Trump’s tax reform proposal, positive Fedspeak as of late and the probability that K.Warsh could succeed J.Yellen at the Federeal Reserve are all collaborating with the upside bias in the buck.

Ahead in the session, September’s non-farm payrolls will grab all the attention, seconded by a slew of Fed speakers: Atlanta Fed R.Bostic (2018 voter, centrist), Boston Fed E.Rosengren (2019 voter, hawkish), NY Fed W.Dudley (permanent voter, dovish), Dallas Fed R.Kaplan (voter, hawkish) and St. Louis Fed J.Bullard (2019 voter, centrist).

US Dollar relevant levels

As of writing the index is gaining 0.18% at 93.94 facing the initial hurdle at 94.14 (high Aug.16) seconded by 94.55 (100-day sma) and finally 95.90 (38.2% Fibo of the 2017 drop). On the downside, a break below 93.37 (10-day sma) would open the door to 92.95 (55-day sma) and then 92.47 (low Sep.20).