The Dollar Index (DXY) failed thrice over the past two days to trade above the significant resistance of around 103.30, DBS’ FX analyst Philip Wee notes.

DXY fails to break above 103.30

“The Greenback was caught between two forces. On the one hand, the greenback reprised its haven role from a sell-off in semiconductor counters that pummeled the major US stock indices from record highs. On the other hand, the dollar’s haven appeal was offset by US bond yields accompanying the decline in equities.”

“The US Treasury 10Y yield tumbled to 4.03% after it held a 4.06-4.12% range in the previous two sessions. San Francisco Fed President Mary Daly played down the recent better-than-expected US nonfarm payrolls and CPI inflation data.”

“As the Fed’s renowned labour economist, Daly believed the US job market was no longer a major source of inflation pressures, adding that firms found it difficult to pass on price increases. Despite last month’s 50 bps cut, interest rates were still restrictive and a long way from neutral, working to lower inflation to its 2% target.”