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USD
Last week’s USD rally has allowed a golden cross to form in the DXY (50-DMA > 200-DMA), with the same pattern also close to forming in the broader BBDXY.
- The previous DXY golden cross formation (September ’23) came ahead of a 2% rally in the index.
- This week has seen follow through limited by Asian FX policy, with the PBoC deploying a firmer pushback against yuan weakness via its daily mid-point fixings (the yuan forms part of the BBDXY basket, but isn't included in the DXY basket) and the Japanese Vice Finance Minister using stronger rhetoric in an attempt to limit JPY weakness.
- Month-end flows could also limit the broader USD, with most sell-side models geared towards moderate USD sales.
- As we have noted elsewhere, related flow could be inconsistent and patchy due to month-end value date falling today and the presence of the Easter holiday
- The DXY remains shy of last week’s high, which protects the year-to-date high just ahead of 105.00.
Fig. 1: U.S. Dollar Index (DXY)
Source: MNI - Market News/Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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