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- DXY pairs losses in the final hours of FX trade and manages to close in the green close to 90.80.
- However, DXY still closed the week with steep losses of just over 1.0%.
The Dollar Index (DXY) picked up into the Friday FX market close, closing the final trading day of the week close to 90.80 with gains of just under 10 points or 0.1%.
USD gasps for breath
It’s been a tough week for USD to say the least. DXY was as high as 92.00 on Monday, reversing aggressively to the downside to hit lows beneath 90.50 on Friday, a drop of more than 1.2% at worst levels. A much-needed technical recovery, or bout of profit-taking appears to have been in play in the final hours of trade, but whether this very minor recovery can continue into next week remains to be seen.
The US dollar has been hit this week on the usual dollar bearish cocktail of factors including US fiscal stimulus and vaccine hopes, dovish Fed expectations and an improved 2021 growth outlook.
Moreover, following Friday’s jobs report, many analysts still see risks for USD as being tilted towards further downside; soft labour market data strengthens the case for further Fed action (dovish and USD negative) as well as more fiscal stimulus (risk on so USD negative).