US DOLLAR INDEX: DXY RETREATS TOWARDS 103.00 DESPITE STRONG YIELDS, FOCUS ON MID-TIER US DATA, CENTRAL BANKERS

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  • US Dollar Index stays pressured for the second consecutive day after reversing from 10-week high on Friday.
  • US Treasury bond yields jump to late 2007 high as market players sell government securities amid mixed mood.
  • Market’s consolidation ahead of Jackson Hole Symposium, China concerns prod DXY bulls.
  • US data, second-ranked Fed officials’ speeches will entertain intraday traders of Greenback.

US Dollar Index (DXY) remains depressed around 103.30 as it renews the intraday low while keeping the week-start pessimism during the early hours of Tuesday’s Asian session. In doing so, the Greenback’s gauge versus the six major currencies ignores the strong US Treasury bond yields amid the market’s mixed sentiment ahead of this week’s top-tier data/events.

That said, the US 10-year Treasury bond yields rose to the highest level since 2007, to around 4.354% before ending Monday’s trading day near 4.34%.

Apart from the pre-Jackson Hole consolidation, the DXY traders also justify China’s efforts to defend the post-COVID economic recovery via a slew of stimulus measures, as well as the receding recession fears across the board.

Additionally, the Federal Reserve Bank of New York unveiled its SCE Labor Market Survey results late Monday that suggested record wage expectations and could have prod the DXY bears. “The Lowest wage respondents would be willing to accept for a new job jumped to a record high of $78,645 in July, up from $72.873 a year ago,” said the findings.

It should be observed that the previous week’s mostly upbeat United States data prod the Federal Reserve (Fed) doves and put a floor under the US Dollar Index. However, some of the top-tier US banks appear struggling to confirm Fed Chair Jerome Powell’s hawkish move at Jackson Hole. That said, Goldman Sachs expects Fed Chair Powell to sound defensive during the annual event of the central bankers but the Bank of America (BofA) expects Fed’s Powell to push back against the rate cut expectations.

During the last week, upbeat activity and wage growth numbers joined hawkish Fed Minutes to enable the US Dollar Index (DXY) to print a fifth weekly run-up. The same also challenged the previous policy pivot concerns and escalate the market’s anxiety before this week’s central bankers’ speeches at the Kansas Fed’s annual event.

Moving on, the US Existing Home Sales for July and Richmond Fed Manufacturing Index for August will join speeches from the mid-ties Federal Reserve (Fed) officials to direct intraday DXY moves. However, major attention will be given to Friday’s Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium amid indecision about the US central bank's next moves

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