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  • The index manages to climb to fresh tops near 95.60.
  • US 10-year yields retreat to the 3.05% level ahead of Powell.
  • Chief Jerome Powell will speak later on employment outlook and inflation.

The greenback, measured by the US Dollar Index (DXY), is now fading part of the earlier spike to the 95.60 region, or multi-day peaks.

US Dollar Index up on risk-off mood, looks to Powell

The index is up for the fifth consecutive session so far on Tuesday and it is now navigating well above the 95.00 milestone in the area of 4-week peaks.

The persistent risk-off mood in the global markets has been bolstering the rally in the buck, while investors’ concern keep growing around the Italian political scenario, taking a toll in EUR/USD.

In the same line, the sentiment around the buck appears sustained by auspicious results from the US docket and the recent rate hike by the Federal Reserve. In this regard and after yesterday’s release of the ISM Manufacturing, Senior Analyst at FXStreet Joseph Trevisani noted “Despite the decline in the September ISM reading, it remains close to a 14 year high. Manufacturing and factory employment will continue their substantial contribution to US economic growth in the fourth quarter”.  

In the data space, Chief J.Powell will speak on inflation and employment outlook later in the day seconded by a Q&A session. In addition, Dallas Fed R.Kaplan (non voter, hawkish) and FOMC’s R.Quarles are also due to speak.

US Dollar Index relevant levels

As of writing the index is gaining 0.33% at 95.60 facing the next hurdle at 95.74 (monthly high Sep.4) seconded by 96.04 (50% Fibo retracement of the 2017-2018 drop) and finally 96.98 (2018 high Aug.13). On the downside, a breach of 94.79 (21-day SMA) would aim for 93.81 (low Sep.17) and then 93.71 (monthly low Jul.9).