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US Dollar retreats from tops, tests 95.00

  • The index fades initial optimism and is now testing 95.00.
  • US 10-year yields sidelined around the 2.90% area.
  • US Current Account deficit widened to $124.1 billion in Q1.

The US Dollar Index, which tracks the greenback vs. its main competitors, faded the initial advance and is now trading in the negative ground in sub-95.00 levels.

US Dollar looks to Powell

The index is shedding further ground during the European afternoon, breaking below the 95.00 handle amidst concerns over US-China trade dispute.

In fact, and according to latest news, China could be ready to make strong countermeasures against US tariffs, propping up the risk aversion, dragging USD/JPY lower and thus weighing on the buck.

The lower move in the greenback has been accompanied by the softer tone in yields of the US 10-year note, which are navigating a tight range around the 2.90% neighbourhood.

In the meantime, the focus of attention remains on the speech by Draghi, Powell and Kuroda at the ECB Forum in Sintra.

US Dollar relevant levels

As of writing the index is up 0.01% at 95.01 facing the next hurdle at 95.30 (2018 high Jun.19) seconded by 96.00 (psychological level) and finally 96.51 (high Jul.4 2017). On the other hand, a breach of 94.54 (low Jun.19) would open the door to 94.24 (10-day sma) and then 94.16 (21-day sma).

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