US Dollar Index drifting lower to 96.70 ahead of US CPI

  • The index losses further momentum and drops to 96.70/65.
  • Yields of the US 10-year note tested 2.70% in early trade.
  • US January CPI next of relevance in the docket.

The continuation of the recovery in the risk-associated universe is forcing the US Dollar Index (DXY), which tracks the greenback vs. a basket of its main rivals, to recede further and re-visit the 96.70/65 band ahead of the opening bell in Euroland.

US Dollar Index looks to data, trade

After recording fresh yearly tops around 97.20 on Tuesday, the index came under increasing selling pressure in response to rising optimism over a positive outcome from the US-China trade talks.

In this regard, an extension of the 90-day truce deadline appears likely according to market consensus. In addition, a probable agreement regarding the US budget has also bolstered the sentiment, all in detriment of the buck.

Moving forward, US inflation figures gauged by the CPI for the month of January will be the salient event along with speeches by FOMC’s Bostic and Harker and the weekly report on US crude oil supplies by the EIA.

What to look for around USD

Further optimism around the US-China trade talks and positive news from the US political arena has been collaborating with the recovery in the riskier assets. On another direction, weakness in overseas economies (vs. solid US fundamentals) plus G10 central banks apparently entering a ‘wait-and-see’ mode have been sustaining the upbeat momentum in the greenback as of late, while there is still a high degree of scepticism regarding the likeliness that the Fed’s tightening cycle could end any time soon.

US Dollar Index relevant levels

At the moment, the pair is losing 0.03% at 96.67 facing the next support at 96.41 (55-day SMA) followed by 96.22 (38.2% Fibo of the September-December up move) and then 96.18 (21-day SMA). On the flip side, a break above 97.20 (2019 high Feb.12) would aim for 97.71 (2018 high Dec.14) and finally 97.87 (monthly high Jun.20 2017).

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: Teasing range breakdown ahead of Powell speech

EUR/USD has been restricted to a narrow range of 1.1115-1.1063 since last Friday. The pair is currently probing the lower edge of the trading range. A range breakdown, if any, could trap sellers on the wrong side of the market if Fed's Powell sounds dovish.


GBP/USD retraces from 3-week high while heading into G7, Jackson Hole

GBP/USD trims latest gains as Tories warn PM Johnson. The increasing scope of soft Brexit triggered the pair’s earlier surge. G7, global central bankers’ appearance at Jackson Hole will be followed for fresh impulse.


USD/JPY: Yen dips as Japan's inflation hovers at 2-year lows

The Japanese Yen is losing altitude in Asia, possibly due to dismal Japanese inflation data and the resulting rise in the dovish Bank of Japan (BOJ) expectations. Japan's core inflation remained at two-year lows in July.


Gold: Looks south with symmetrical triangle breakdown on 4H

Gold has dived out a symmetrical triangle pattern on the 4-hour chart. The daily chart indicators also favor a drop to $1,480. Essentially, sellers have come out victorious in a tug of war with the bulls.

Gold News

The audiences of Chairman Powell

The FOMC vote in July to drop the fed funds rate 0.25% for the first time since December 2008 was 8-2 with some members who approved the reduction doubting its logic or necessity. 

Read more