US Dollar eases to 93 on dovish commentary from Kashkari

Although the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, was able to retrace its CPI data-led slide, it came under a renewed pressure after Minneapolis Fed President Neel Kashkari delivered some dovish remarks. As of writing, the index was at 93, losing 0.3% on the day.

Earlier in the session, the index plummeted to its lowest level in a week at 92.90 as the data released by the U.S. Bureau of Labor Statistics showed that the Consumer Price Index for All Urban Consumers (CPI-U) rose 1.7% on a yearly basis in July, missing projections for a 1.8% increase. 1.8%. However, as the underlying details of the report showed that the falling energy prices, which is seen as a temporary factor, was the primary reason why the inflation didn't rise as much as investors expected, the index quickly recovered its losses and jumped back above the 93 mark.

Nevertheless, the index struggled to preserve its bullish momentum in the remainder of the session as Kashkari argued that the weak CPI inflation reading was another reason to hold off rate hikes.

Technical outlook

Despite today's retreat, the greenback was able to remain relatively resilient against its peers throughout the week. A weekly close above the 93 mark could allow the index to make fresh correction attempts in the short-term. The initial hurdle for the index aligns at  93.80 (Jul. 28 high) ahead of 94.20 (Jul. 21 high) and 95 (psychological level/Jul. 20 high). On the downside, supports could be seen at 93/92.90 (psychological level/daily low), 92.40 (Aug. 2 low), and 91.90 (May 3, 2016, low).

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