US Dollar off highs, back near 90.60 ahead of ISM, Powell

• Upside in DXY faltered in the 90.75/80 band, 6-week tops.
• Change in sentiment, month-end flows supported USD recently.
• US ISM manufacturing, PCE, Powell’s testimony next of relevance.

The greenback, measured by the US Dollar Index (DXY), managed to clinch fresh multi-week tops in the 90.75/80 band earlier in the session, albeit losing some momentum soon afterwards.

US Dollar now looks to data, Powell

The index keeps the healthy upside so far this week, albeit some selling mood seems to have turned up around recent tops in the vicinity of 90.80.

It is worth noting that the buck has already gained nearly 3% since multi-year lows seen in mid-February around 88.20, all on the back of rising expectations of further tightening by the Federal Reserve, perspectives of higher inflation in the medium term and solid US data as of late.

The up move in DXY has come despite yields of the key US 10-year reference dropped around 10 bps from recent tops in the 2.96% neighbourhood and are now looking to consolidate in the 2.85%/2.86% band.

It will be a very interesting day for the greenback as another testimony by Chief Powell is due later today, this time before the Senate Banking Committee. In addition, inflation figures measured by the PCE are also due along with Personal Income/Spending, ISM manufacturing and the usual weekly report on the labour market.

Furthermore, New York Fed and permanent voter W.Dudley (centrist) is also due to speak later in the NA session.

US Dollar relevant levels

As of writing the index is losing 0.06% at 90.61 and a breakdown of 89.90 (10-day sma) would aim for 89.74 (21-day sma) and finally 89.51 (low Feb.26). On the other hand, the next hurdle emerges at 90.89 (55-day sma) followed by 91.00 (high Jan.18) and finally 92.22 (100-day sma).