US Dollar Index keeps bounce off multi-day low with eyes on US Durable Goods Orders, PMIs – by anilpanchal7 DollarIndex Fed RiskAversion PMI Banks
and more banking turmoil.
That said, a collapse in the banking shares and chatters that the Fed’s emergency lending to the banks has ballooned the balance sheet, renewing fears of more Fed rate hikes, which in turn allowed the DXY to pare recent losses. Also favoring“Federal Reserve emergency lending to banks, which hit record levels the last week, remained high in the latest week, amid continued large-scale extensions of credit to the financial system, which now includes official foreign borrowing.,” reported Reuters.
It should be noted that the US Treasury Secretary’s testimony in front of the House Appropriations Financial Services Subcommittee probed the market’s previous risk-on mood and allowed the US Dollar Index to pare losses at the seven-week low. “China and Russia may want to develop an alternative to the US dollar,” while also showing preparedness for additional deposit actions `if warranted'. “Strong actions have been taken to ensure deposits are safe,” said US Treasury Secretary Yellen.
Against this backdrop, Wall Street pared intraday gains and closed with a light green number whereas the Treasury bond yields also recovered but failed to post a positive closing. Looking ahead, preliminary readings of the US S&P Global PMIs for March and the Durable Goods Orders for February will be crucial for the US Dollar Index traders to watch as firmer readings could join the aforementioned factors to extend the latest DXY recovery.Although the lower band of the Bollinger on the daily chart restricts US Dollar Index downside near 102.30, the DXY bulls need validation from the 50-DMA hurdle of 103.45 to extend the rebound.
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