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  • The index loses further ground and tests the 97.20 area.
  • US-China trade negotiations in the limelight.
  • US CPI failed to meet expectations in April.

The greenback, in terms of the US Dollar Index (DXY), is now shedding further ground and visits the 97.20 area, or fresh daily lows.

US Dollar Index weaker post-CPI

The index has dropped to fresh multi-day lows in the 97.20 after US inflation figures has once again disappointed expectations. This time, consumer prices gauged by the CPI rose at a monthly 0.3% during last month and 2.0% over the last twelve months.

Additional data saw prices stripping food and energy costs rising 0.1% inter-month and 2.1% from a year earlier.

In the meantime, investors continue to look to headlines from the US-China trade talks in Washington, while China reiterated earlier in the week that it is ready to take measures to counteract any outcome from the trade talks.

What to look for around USD

The centre of the debate for the greenback has shifted to the US-China trade dispute, although a high degree of uncertainty as well as scepticism among investors seem to prevail for the time being. On another direction, the lack of traction in US inflation – and concerns among Fed members – currently challenges any serious bullish attempt in DXY. Dips in the buck, however, are seen shallow as overseas weakness, the safe haven appeal, favourable yield spreads vs. the Fed’s G10 peers and the status of global reserve currency keep the constructive bias on the buck unchanged.

US Dollar Index relevant levels

At the moment, the pair is losing 0.20% at 97.22 and a breach of 97.15 (low May 1) would aim for 97.07 (55-day SMA) and finally 96.75 (low Apr.12). On the other hand, the next hurdle aligns at 98.10 (high May 3) seconded by 98.32 (2019 high Apr.25) and then 99.89 (high May 11 2017).