• DXY regains further ground and retests the 93.75/80 band.
• US Core PCE came at 3.6% YoY in October, 0.2% MoM.
• Final October U-Mich Index comes next.

The US Dollar Index (DXY), which tracks the greenback vs. a basket of its main rival currencies, accelerates the daily recovery and flirts with the 100-hour SMA near 93.80 o Friday.

US Dollar Index up on higher yields, sticky inflation

The index extends the bounce off the 93.30 region and manages to advance to the 93.75/80 band at the end of the week on the back of rising US yields and persistent elevated US inflation.

In fact, yields in the front end and the belly of the curve extend the leg higher to the 0.55% region and the vicinity of 1.62%, respectively, while the long end clings to the positive ground around 1.98%.

The index gathered steam after US inflation figures tracked by the PCE rose 4.4% in a year to September, while the Core PCE rose 3.6% and matched the August’s reading. Additional data saw Personal Spending up 0.6% MoM inter-month and Personal Income contracting 1.0% from a month earlier.

US Dollar Index relevant levels

Now, the index is gaining 0.33% at 93.67 and a break above 94.02 (weekly high Oct.26) would open the door to 94.17 (weekly high Oct.18) and then 94.56 (2021 high Oct.12). On the flip side, the next down barrier emerges at 93.27 (monthly low October 28) followed by 92.98 (weekly low Sep.23) and finally 92.86 (100-day SMA).