US Dollar up smalls near 90.30, risk-on picks up pace

• The index is gathering traction on better mood around risk.
• US 10-year yields bounce off lows and regain the 2.80% area.
• US-China trade war shrinking fears gave legs to the riskier assets.

The US Dollar Index, which tracks the greenback vs. its main competitors, is now gathering some steam and tests the area of daily tops near 90.30.

US Dollar looks to trade war, FOMC

After Friday’s sharp pullback following mixed results from March’s Non-farm Payrolls, the index manages to regain some buying interest and is now flirting with the 90.30 region, or daily peaks.

In fact, poor job creation during March (103K), steady jobless rate (4.1%) and in line wage inflation seemed to have motivated USD-bears to step in at the end of last week and drag DXY to the 90.00 neighbourhood, where strong contention emerged.

US-China potential for a trade war appears diminished today after a somewhat conciliatory tweet by President Trump over the weekend, hinting at an eventual agreement between both countries.

News from the speculative community noted USD net shorts dropped to 2-week lows on the week to April 3, as per the latest CFTC report.

In the US data space, the next relevant publication will be tomorrow’s Producer Prices ahead of Wednesday’s more relevant CPI figures and the FOMC minutes.

US Dollar relevant levels

As of writing the index is up 0.05% at 90.17 and a breakout of 90.89 (38.2% Fibo of 95.15-88.25) would open the door to 90.93 (high Mar.1) and finally 91.00 (high Jan.18). On the flip side, the next support lines up at 90.07 (low Apr.6) seconded by 89.93 (21-day sma) and then 89.82 (low Apr.2).