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  • The index remains sidelined above the 97.00 handle so far.
  • Yields of the US 10-year note met support around 2.65%.
  • Industrial Production, Empire State index next on US docket.

The US Dollar Index (DXY), which gauges the greenback vs. a backset of its main competitors, is clinging to its daily gains above the key 97.00 the figure.

US Dollar Index looks to trade, data

The index found some grip on fading optimism on a positive outcome from the onging US-China trade talks, which is helping it to keep business above the critical 97.00 mark so far.

Yields of the US 10-year note sharply dropped to lows in the 2.65% region in the wake of disappointing figures from Retail Sales during December and are now looking to stabilize around that area.

In the data sphere, Industrial Production, Capacity Utilization, the Empire State manufacturing gauge and the advanced Consumer Sentiment measure are all due later in the NA session.

What to look for around USD

Alternating news and rumours on the US-China trade talks remain poised to add volatility to both the greenback and riskier assets in the very near term. Recent poor prints from Retail Sales have prompted investors to remain vigilant on upcoming data, as they continue to assess the probability of a deceleration in the US economy in the next months. On the broader picture, the slowdown in overseas economies in combination with ‘softer’ stance in G10 central banks keeps occasional dips in the buck somewhat shallow. This view is reinforced by rising scepticism over a potential halt in the Fed’s tightening cycle this year.

US Dollar Index relevant levels

At the moment, the pair is advancing 0.04% at 97.06 facing the next hurdle at 97.26 (2019 high Feb.13) followed by 97.71 (2018 high Dec.14) and then 97.87 (monthly high Jun.20 2017). On the other hand, a break below 96.79 (23.6% Fibo of the September-December up move) would open the door to 96.65 (10-day SMA) and finally 96.42 (55-day SMA).