US Dollar Index challenges the 92.00 area on disappointing NFP

• DXY briefly breached the 92.00 support post-Payrolls.
• US 10-year yields rebound to daily highs near 1.33%.
• The US economy added “just” 235K jobs in August.

The selling pressure keeps dictating the price action around the greenback and now relegates the US Dollar Index (DXY) to the 92.00 neighbourhood on Friday.

US Dollar Index stays depressed around 92.00

The index accelerates the downtrend and briefly tests the sub-92.00 area on Friday after the Nonfarm Payrolls surprised (largely) to the downside in August. Indeed, the US economy added 235K jobs during last month, well below the 750K jobs expected by markets’ consensus. The July’s print was revised higher to 1.053M jobs (from 943K).

On a brighter side, the jobless rate receded to 5.2% and the Average Hourly Earnings gained 0.6% inter-month and 4.3% on an annualized basis, all prints bettering previous estimates. The Participation Rate, instead, stayed unchanged at 61.7%.

The pullback in DXY comes in contrast to the rebound in yields of the US 10-year reference to the 1.33% zone, breaking above the daily consolidative theme near 1.30%.

The chances that the Fed could announce the start of the tapering process at its September event have now taken a hit, at the same time that market participants could start pencilling in a probable announcement at the November or December meetings.

US Dollar Index relevant levels

Now, the index is losing 0.20% at 92.02 and faces the next support at 91.94 (monthly low Sep.3) followed by 91.78 (monthly low Jul.30) and finally 91.62 (100-day SMA). On the other hand, a break above 92.51 (55-day SMA) would open the door to 93.18 (high Aug.27) and then 93.72 (2021 high Aug.20).