US Dollar Index (DXY) advances to weekly top around 99.80; lacks bullish conviction
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, gains positive traction for the second consecutive day on Wednesday and moves further away from the monthly low touched earlier this week.
The momentum lifts the index to the 99.80 region, or a fresh weekly top during the Asian session, though it seems to lack bullish conviction.
The upbeat US macro data released on Tuesday helped calm recession fears, which, in turn, is seen as a key factor acting as a tailwind for the DXY.
In fact, the US Census Bureau reported that Durable Goods Orders declined by 6.3% in April, marking a stark turnaround from the 7.6% increase (revised from 9.2%) in the previous month.
The reading, however, was better than the market expectation for a decrease of 7.9%. Adding to this, orders excluding transportation rose 0.2% during the reported month.
Furthermore, the Conference Board's US Consumer Confidence Index rebounded sharply after a prolonged fall since December 2024 and jumped to 98 in May.
This represents a 12.3 points increase from 85.7 in April, marking the biggest monthly rise in four years amid an improving outlook for the economy and the labor market on the back of the US-China trade truce. This, in turn, inspires the USD bulls, though US fiscal concerns and dovish Federal Reserve (Fed) expectations might cap any further gains.
Source: Fxstreet
