US Dollar consolidates losses, stays afloat above 92 mark

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, reversed course in the second half of the NA session and dropped to new daily low at 92.06. The index has been spending the last hour consolidating its losses in a tight range and was last seen at 92.13, down 0.28% on the day.

Earlier in the session, the index jumped to a fresh 10-day high at 92.66 after the data from the U.S. showed that consumer prices accelerated at a faster pace than expected. According to the data released by the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in August, the largest in seven months, pushing the annual CPI rate up to 1.9%. Commenting on the data, “today’s report should ease some of the low inflation concerns among wavering Fed officials, and we continue to expect the leadership will prevail in getting another hike in at the December meeting,” Michael Feroli, an economist at JPMorgan in New York, told Reuters.

In fact, following the data, the probability of a 25 bps rate hike in December increased to 51% from 42% according to the CME Group FedWatch Tool.

However, despite the upbeat inflation readings, the greenback struggled to preserve its bullish momentum. Chairman of the House Ways and Means Committee Kevin Brady, the top Republican tax law writer in the U.S. House of Representatives, said that the tax reform framework, which is expected to be announced during the week of September 25, wouldn't contain specific numbers on income tax rates for corporations and individuals. During the first half of the week, hopes of a tax-reform being finalized before the end of the year had fueled the greenback's rally.

Technical outlook

A daily close above 92 (psychological level) could allow the index to make fresh attempts to extend its gains. 92.70 (Sep. 5 high) could be seen as the first target on the north ahead of 93.30 (Aug. 31 high) and 94 (psychological level). On the downside, supports align at 91.40 (Sep. 7 low), 91 (Sep.8 low) and 90 (psychological level).

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.