DXY inter-markets: looking to Payrolls

The greenback – in terms of the US Dollar Index – has managed to grab some buyers’ attention today, now looking to retake the critical 102.00 barrier after bottoming out in the 101.70 area following the hawkish message from the ECB at its meeting today.

President Mario Draghi sounded unexpectedly hawkish, lending extra wings to the already bid tone around the single currency and collaborating with the spike in German yields, which narrowed the spread vs. their American peers.

However, the bid tone in USD stays intact, largely propped up by expectations of a rate hike by the Federal Reserve at its March meeting. According to agency Reuters’s Fedwatch, the probability of a 25 bp hike is at 87.5% based on Fed Funds futures prices.

In addition, recent rock-solid results from the ADP report have also collaborated with the upbeat sentiment around the buck and seems to have opened the door to a potential surprise at Friday’s Non-farm Payrolls (190K exp.).

In the meantime, DXY appears supported in the 101.70 region ahead of the 101.30 area, where coincide the 20- and 55-day sma. On the upside, recent peaks near 102.30 emerge as the interim hurdle, with not much until the 103.00 handle in case they’re cleared.