DXY inter-markets: further downside limited?

The US Dollar Index – which tracks the buck vs. a basket of its main competitors – has somewhat recovered the smile on Tuesday, halting (for the moment at least) the sharp pullback accentuated in response to the inability of President D.Trump to replace ‘Obamacare’ with the American Health Care Act (known as ‘Trumpcare’).

US yields showed some optimism at the beginning of the session, although it has watered down with the hours, sending yields closer to recent lows. The 10-year reference is hovering over the 2.37% handle after briefly touching 2.35% on Monday.

Auspicious US results today showed CB’s Consumer Confidence surging to the highest level since December 2000 above 125.0, although it did not echoed on the buck, at least not positively.

Upcoming Fedspeak (Yellen, Powell, George, Kaplan) could bring in some bouts of volatility around the greenback, although the renewed underlying bearish move appears to stay for some time, waiting for more signs from the Trump’s administration on the potential timing and further details of the ‘promised’ fiscal reforms.

Back to DXY, the longer term outlook stays constructive while above the 10-month support line, today around 98.25, although this could come under pressure if recent lows in the mid-98.00s are cleared (including the key 200-day sma at 98.58).