US Dollar climbs to over 1-week tops, sits comfortably above 97.00 mark

   •  Stronger core PPI figures helped regain positive traction.
   •  Positive US bond yields remain supportive of the up-move.
   •  The risk-on mood seemed to be the only factor capping gains.

The US Dollar Index (DXY) has managed to recover early lost ground and is currently placed at over one-week tops, comfortably above the 97.00 handle.

After spending the majority of Tuesday's trading session in negative territory, the greenback regained traction and picked up pace following the release of stronger than expected core PPI figures for November.

In fact, the index for final demand – excluding food, energy, and trade services, climbed 0.3% in November and 2.8% for the 12 months ended in November, while the headline PPI print matched consensus estimates.

Adding to this, a mildly positive tone around the US Treasury bond yields further underpinned the greenback demand and remained supportive of the intraday strong rebound. 

Meanwhile, global risk appetite got a strong boost amid some renewed US-China trade optimism, which might dampen the buck's relative safe-haven status and turn out to be the only factor keeping a lid on any runaway rally.

According to a Bloomberg report, a proposal to reduce tariffs on cars made in the US to 15%, from the current 40%, has been submitted to China's Cabinet to be reviewed in the coming days and triggered a sharp rally across European/US equity markets.

Technical levels to watch