US Dollar recovers to 90.40, near daily tops

• DXY eyes 90.50, session highs.
• Risk-off, volatility helping USD.
• Trump signed deal, shutdown averted.

The greenback, in terms of the US Dollar Index (DXY), met dip buyers in the 90.10 region and is now trading closer to daily tops in the mid-90.00s.

US Dollar bid after budget deal

The index stays bid after President Trump signed a bipartisan budget deal, putting an end at the same time to the government shutdown. The fresh deal increases the budget by $300 billion over the next two years, mainly boosting defence and domestic spending.

USD is ending its second consecutive week on a positive note amidst a negative performance from US stocks, while yields of the key US 10-year benchmark navigates the 2.83% area, some 6 bp lower than Monday’s tops above 2.88%.

In the meantime, the buck appears somewhat supported by the current effervescence in the global markets, as the ‘flight-to-safety’ sentiment appears to have taken a hold among investors once again.

Moving forward to next week’s docket, the next risk event will be the release of January’s inflation figures tracked by the CPI and retail sales during the same period, all due on Wednesday.

US Dollar relevant levels

As of writing the index is up 0.03% at 90.33 and a break above 90.57 (high Feb.8) would target 90.70 (high Jan.22) en route to 90.98 (high Jan.18). On the other hand, the immediate support emerges at 88.55 (low Feb.2) seconded by 88.42 (2018 low Jan.25) and finally 86.82 (weekly trend line off 72.70).