US Dollar anaemic below 89.00

Analysis General

Published: 2/15/2018 10:40:00 AM
News


The US Dollar Index (DXY), which tracks the buck vs. its main competitors, keeps the bearish view unchanged so far this week and is now looking to consolidate below the 89.00 limestone.

US Dollar weaker despite higher yields

Another day, another drop in the index. The greenback stays well on the defensive this week and is not only losing more than 2% since Friday’s tops in the mid-90.00s but it is also trading closer to YTD lows in the 88.50 region, all within a broad bearish scenario.

Today’s releases in the US docket showed mixed results, with the Philly Fed index surprising markets to the upside and the Empire State index missing consensus. Similarly, producer prices rose in line with expectations in January while industrial production contracted more than previously forecasted.

Price action around the buck remains unclear at least in the near term. Uncertainty in the US politics keeps the downside pressure intact, while markets keep debating the prospects of further tightening by the Federal Reserve (two, three, four rate hikes this year?), all amidst a great dose of scepticism.

US Dollar relevant levels

As of writing the index is losing 0.29% at 88.77 with the initial support at 88.55 (low Feb.2) seconded by 88.42 (2018 low Jan.25) and finally 86.85 (weekly trend line off 72.70). On the upside, a break above 90.57 (high Feb.8) would target 90.70 (high Jan.22) en route to 90.98 (high Jan.18).



Tag: General
Source: FXSTREET
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