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US Dollar finds some oxygen around 93.60

  • USD found support near 93.40.
  • US politics keeps weighing on the buck.
  • Trump, tax reform still in centre stage.

After bottoming out in the vicinity of 93.40, the US Dollar Index (DXY) – which gauges the greenback vs. a basket of its main rival currencies – managed to gather some buying interest and climb to the current 93.60/65 band.

US Dollar focused on Trump, tax reform

The index met a wave of selling orders after Special Counsel R.Muener issued a subpoena on Trump’s presidential campaign documents. The news, cited by WSJ, badly hurt the greenback and forced US 10-year yields to drop to session lows in the 2.35% area.

Somewhat supporting the buck, the House Republican voted its tax reform bill on Thursday and it is the Senate’s turn now to pass its bill. Furthermore, it is worth recalling that both bills should reconcile at a later stage, thus paving the way for its implementation at some point by year-end.

Further out, San Francisco Fed J.Williams said yesterday that a rate hike next month is ‘perfectly reasonable’, while Atlanta Fed R.Kaplan noted that diminishing unemployment should be a catalyst for extra tightening.

US Dollar relevant levels

As of writing the index is retreating 0.20% at 93.72 and a breakdown of 93.40 (low Nov.15) would open the door to 93.37 (55-day sma) and finally 93.06 (low Oct.19). On the other hand, the initial hurdle lines up at 93.99 (high Nov.16) seconded by 94.31 (10-day sma) and then 95.15 (high Nov.7).

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