DOLLAR INDEX is trading up 0.28% at 101.84
The U.S. dollar edged higher in early European trade Wednesday, helped by higher Treasury yields as the focus turned once more towards soaring global inflation.
At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher to 101.995, extending the previous session’s rally.
The index had fallen to a five-week low of 101.29 earlier in the week as expectations started to grow that U.S. inflation showed signs of peaking amid the Federal Reserve’s aggressive policy tightening, suggesting the U.S. central bank could pause its cycle of interest rate hikes after two more increases in June and July.
However, sentiment has started to shift again after data showed Eurozone consumer inflation soaring to a record, and oil prices climbed to their highest levels since early March, resulting in benchmark 10-year Treasury yields reaching 2.88% overnight, the highest since May 19.
Additionally, U.S. President Joe Biden met with Fed Chairman Jerome Powell, with Biden affirming a “laser focus on addressing inflation” ahead of the November midterms.
The Fed will start shrinking its $8.9 trillion balance sheet and release its Beige Book, later in the day, while New York Fed President John Williams and St. Louis Fed President James Bullard will also speak at separate events.
In terms of economic data, April job openings, the JOLTS job report, are due at 10 AM ET (1400 GMT), ahead of Friday’s release of the widely watched monthly official employment report.
On technical fronts DOLLAR INDEX RSI stood at 28.53 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:
TRADE SIGNAL – : DOLLAR INDEX – BUY: 115.77, TARGET: 116.86, STOP LOSS : 114.82