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US Dollar trims gains, back around 95.00

  • DXY recedes from daily highs above 95.00.
  • Softer US-10 year yields behind the correction lower.
  • US data surprised to the upside.

The US Dollar Index, which gauges the greenback vs. a basket of its main competitors, has returned to the 95.00 neighbourhood after climbing as high as 95.15 earlier in the session.

US Dollar tracking US yields

The now softer tone in yields in the US money markets is acting as a magnet for the current knee-jerk around the buck. In fact, yields of the US 10-year benchmark are printing fresh weekly lows in the vicinity of the 2.31% handle at the time of writing, forcing DXY to shed further ground.

Despite the ongoing up move, the buck should stay vigilant on the headlines coming from the US political scenario, particularly those regarding the Trump’s tax reform proposal, which is now facing some internal conflicts among Republicans and faces strong opposition from Democrats.

In the data US data space, the IBD-TIPP index came in above estimates at 53.6, while JOLTs job openings also bettered consensus in September at 6.093 million.

US Dollar relevant levels

As of writing the index is up 0.30% at 95.01 and a breakout of 95.15 (high Nov.7) would open the door to 95.90 (38.2% Fibo of the 2017 drop) and then 96.68 (200-day sma). On the downside, the immediate support aligns at 94.65 (10-day sma) seconded by 94.42 (low Nov.2) and finally 94.03 (23.6% Fibo of the 2017 drop).

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