The U.S. Dollar Index (DXY) rose by nearly 0.75% today after the latest non-farm payroll (NFP) print pointed to continued resilience in the U.S. labor market.
The data print raises hopes for a soft landing while skirting recession. With today’s gains, DXY has now inched up by 2.46% year-to-date. Yields on the U.S. 2-year and 10-year treasuries have also soared by 4.3% and 4.4% at the time of writing.
With the USD seeing positive momentum, the Euro and the Yen could come under pressure. Following the surprise from NFP data, the U.S. Fed could extend its wait-and-see approach. Any potential delay in rate cuts could safely translate into more gains for the DXY.
Further, rising hourly wages, faint signs of tensions easing in the Middle East, and ever-fading hopes of March rate cuts could push DXY past the resistance level of 103.95 sooner than anticipated. Importantly, the index has zoomed up after finding firm support at the 45-day SMA.
Source: TradingView
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