The US Dollar Index – which tracks the buck vs. its main rivals – has reverted the initial negative tone and is now trading back around the 93.80 area, or daily highs.

US Dollar attention to FOMC

The index is advancing for the third consecutive session so far today, always on the back of improved sentiment around the back, auspicious results from the US docket and a healthy rebound in US yields.

USD clinched fresh multi-day tops beyond the 94.00 handle on Tuesday in response to solid prints from US retail sales during July, surpassing initial estimates. Additionally, the regional manufacturing gauge tracked by the NY Empire State index has also come in well above expectations.

Further support for the buck came from the US money markets, where yields of the 10-year benchmark rose to highs just beyond 2.28%, although deflating a tad soon afterwards.

In the same line, NY Fed W.Dudley (permanent voter, hawkish) showed himself confident on Monday that the Fed could hike rates for the third time this year as long as data match forecasts, while he also added that the Fed should start reducing its balance sheet soon.

Later in the NA session, housing starts and building permits are next on tap, followed by the FOMC minutes.

US Dollar relevant levels

The index is gaining 0.03% at 93.78 and a break above 94.04 (high Aug.15) would open the door to 94.11 (high Jul.26) and fnally 95.10 (23.6% Fibo of the 2017 drop). On the flip side, the next support lines up at 93.44 (21-day sma) seconded by 92.83 (low Aug.11) and finally 92.39 (2017 low Aug.2).

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