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  • The index manages to rebound from lows near 96.60.
  • Yields of the US-10 year note tumbled to lows near 3.01%.
  • PCE, Personal Income/Spending, FOMC minutes next on tap.

The US Dollar Index (DXY), which tracks the greenback vs. its main competitors, remains on the defensive for another session   although it has managed to bounce off lows around 96.60.

US Dollar Index looks to data

The greenback took a hit on Wednesday, tumbling from tops near 97.60 to today’s lows in the vicinity of 96.60, all following a wave of selling pressure in response to Powell’s dovish message yesterday.

In fact, at his speech at the Economic Club in Ney York, Chief J.Powell stressed rates are ‘just below’ neutral, triggering a sudden and sharp sell off in the buck, while markets are now expecting a rate hike next month and just one in 2019.

In view of analysts at Danske Bank, “We still believe the Fed is keen on getting to neutral and stick to our call that it is going to hike next month and in March and June, where the Fed funds rate would then be 3.00%. A final hike on top of that cannot be ruled out”.

Moving forward, US inflation figures tracked by the PCE are next of relevance seconded by Initial Claims, Pending Home Sales, Personal Income/Spending and the FOMC minutes will close the calendar for the day.

US Dollar Index relevant levels

As of writing the index is losing 0.04% at 96.82 and break below 96.62 (low Nov.29) would open the door to 96.32 (low Nov.22) and finally 96.04 (low Nov.20). On the upside, the next hurdle aligns at 97.53 (high Nov.28) seconded by 97.69 (2018 high Nov.12) and then 97.87 (61.8% Fibo retracement of the 2017-2018 drop).