US Dollar stronger, bounces off 96.00

Pablo Piovano FXStreet

The greenback, tracked by the US Dollar Index, remains on a firm fashion following last week’s ‘Brexit’ vote at the UK referendum.

US Dollar bolstered by risk aversion

The index has managed to bounce off the 96.00 neighbourhood, currently trading around 96.20 after climbing as high as daily tops near 96.50 during overnight trade.

Increasing risk aversion in the aftermath of the decision by the UK to leave the European Union keeps weighing on the risk-associated assets in favour of the usual safe havens like USD, JPY and CHF.

Another immediate implication of the recent events in the UK is the likeliness that the Federal Reserve could refrain from hiking the Fed Funds rates this year. According to CME Group’s FedWatch tool, the probability of a rate hike in December is just a tad higher than 23%, while market rumours are even seeing a possibility of a rate cut by year end (around 12%).

US Dollar relevant levels

The index is advancing 0.66% at 96.08 facing the next hurdle at 96.70 (high Jun.24) followed by 97.09 (high Mar.16) followed by 98.58 (high Mar.1) and then 98.59 (high Mar.2). On the flip side, a breach of 93.03 (low Jun.23) would expose 92.52 (low Aug.24 2015) and finally 91.88 (2016 low May 3).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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