The greenback, in terms of the US Dollar Index, manages well to keep the trade around daily highs in the mid-97.00s for the time being.
US Dollar bid on data, sentiment
The index is reverting five consecutive sessions with losses so far today amidst some respite around the recent controversy involving President Trump, the FBI and Russia.
However, as market participants continue to unwind the ‘Trump trade’, the developments from the US political scenario should remain a key driver for the greenback at least in the near term, relegating the potential rate hike by the Federal Reserve to a secondary role.
According to CME Group’s FedWatch tool the probability of higher rates next month is at just above 69%, about 15 pts down from last week’s measures.
USD has also derived support from the upbeat results from the weekly report on Initial Claims and the Philly Fed Manufacturing Index, both coming above expectations.
US Dollar relevant levels
The index is gaining 0.29% at 97.62 and a break above 98.01 (high May 17) would aim for 98.77 (high May 16) and finally 98.84 (20-day sma). On the flip side, the immediate support aligns at 97.28 (2017 low May 17) followed by 96.94 (low Nov.4 2016) and then 95.91 (low Nov.9 2016).