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  • The index remains on the defensive around 96.00.
  • US trade deficit widened to nearly 480 billion in December.
  • Fed’s Powell coming up next in the docket.

The US Dollar Index (DXY), which tracks the greenback vs. a basket of its main rivals, keeps the bearish note unchanged so far this week around the 96.00 mark.

US Dollar Index focused on Trump, Powell

The index is down for the fourth consecutive session so far today, navigating the area of 3-week lows amidst the continuation of the better sentiment surrounding the riskier assets.

Also weighing on the buck, December’s US trade deficit rose to $79.49 billion, more than previously estimated. Later in the session, December Factory Orders and January Pending Home Sales are also scheduled for release seconded by the EIA weekly report on crude oil inventories.

Still on the US docket, Chief Powell will testify once again, this time before the House Financial Services Committee. Consensus among market participants, however, expects his tone to be in line with yesterday’s testimony.

On another side, President Trump is meeting NK’s Kim jong un in Vietnam with the Nort Korean nuclear programme on top of the agenda.

What to look for around USD

The US-China trade dispute remains in centre stage when comes to drive the global sentiment for the time being. In addition, all eyes will be on the Trump-Kim meeting today and tomorrow as a potential driver on the geopolitical side. The release of another estimate of the Q4 GDP (Thursday) will also give markets and idea of how the US economy fared in late 2018. Attention will also be on the second testimony by Fed’s Powell at Capitol Hill, although this event will unlikely be a market mover.

US Dollar Index relevant levels

At the moment, the pair is losing 0.05% at 95.99 and a break below 95.88 (low Feb.26) would target 95.63 (200-day SMA) en route to 95.16 (low Jan.31). On the upside, the next hurdle emerges at 96.40 (21-day SMA) followed by 96.55 (10-day SMA) and then 96.79 (23.6% Fibo of the September-December up move).