The US dollar fell across the board on Thursday and during the last hours of the day, it managed to move off lows. Greenback turned to the downside after Mnuchin interview.
Markets reflect confidence in US economy - US Sec. S.Mnuchin
The Dollar Index dropped from 101.30 to 100.83, hitting a 3-day low. Now is hovering around 101.00. The index is about to lost ground for the second day in a row, as it continues to pullback after finding again resistance at 101.70/75, setting up a potential short-term double top.
Equity indexes in the US reached new all-time highs despite the fact that US yields fell. In the currency market, the best performer among the most traded currencies was the Mexican peso. Gold reached 3-month highs above $1250 on the back of the USD decline.
“US 10yr treasury yields fell from 2.45% to 2.38%, while the 2yr fell from 1.22% to 1.19%. US Fed fund futures implied rates were mixed, the April contract at 0.72%, implying around a 40% chance of a rate hike in March. FOMC member Lockhart, who retires soon, said the data supports 2-3 hikes this year. Kapaln said the Fed should move sooner than later. Treasury Secretary Mnuchin said a long bond (50yr to 100yr) is worth consideration, and that tax reform by August is the aim”, resumed today’s session, Imre Speizer, from Westpac.
DXY levels
To the downside, support levels might lie at 100.75/83 (Feb 20 low) and 100.40 (Feb 16 & 17 low). On the upside, resistance could be seen at 101.15 (Feb 22 low), 101.40 (Feb 14 & 23 high) and 101.70/75 (Feb 15 & 22 high).
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