The US Dollar Index - which tracks the buck vs. its main competitors - keeps the upside intact today and is currently advancing to fresh highs in the mid-97.00s.
US Dollar in 3-month tops
The index met extra buying pressure on Tuesday, navigating the area of multi-month peaks around 97.50 and on its way to a potential test of July’s tops in the 97.60/65 band.
Rising speculations on the likeliness of a rate hike by the Federal Reserve at its December meeting keep sustaining the broad-based sentiment around the dollar. In fact, CME Group’s FedWatch tool now sees the probability of higher rates by year-end at above 63%.
In addition, US yields are navigating a ‘sea of green’, collaborating with the bid tone in the buck and thus limiting any attempt of recovery in the risk-associated universe.
On the data front, the Fed’s Labor Market Conditions Index has dropped to -2.2 for the month of September. Next on tap will be the speech by Minneapolis Fed N.Kashkari (2017 voter, neutral).
US Dollar relevant levels
The index is advancing 0.54% at 97.45 and a break above 97.62 (high Jul.25) would open the door to 98.59 (high Mar.3) and then 99.95 (high Jan.21). On the downside, the initial support aligns at 95.90 (200-day sma) ahead of 95.12 (support line off 2016 low) and finally 94.44 (low Sep.8).
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