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  • The index stays weak and tests fresh lows in the 93.70 region.
  • US 10-year yields remain on the defensive around 2.98%.
  • US Initial Claims, Fed’s Dudley next of relevance later in the day.

The greenback, in terms of the US Dollar Index (DXY), is trading on the defensive in the second half of the week, retreating to the 93.70 region following the opening bell in Euroland, fresh daily troughs.

US Dollar focused on data, yields

Following yesterday’s new 2018 tops in the boundaries of 94.20, the index sparked a correction lower on the back of declining US yields and renewed selling sentiment around the buck.

In fact, yields of the key US 10-year note continue their move lower and has now broken below the critical support at the 3.0% level, recording at the same time fresh multi-day lows.

The greenback stayed apathetic following the publication of the FOMC minutes on Wednesday, where the Committee said a temporary overshooting of the Fed’s inflation goal would be welcome. In addition, several members noted it will be important to continually monitor the yield curve.

In the US data space, weekly Initial Claims are coming up next seconded by the speech by NY Fed W.Dudley (permanent voter, centrist).

US Dollar relevant levels

As of writing the index is losing 0.18% at 93.83 and a breakdown of 93.37 (10-day sma) would target 93.30 (low May 21) en route to 92.87 (21-day sma). On the other hand, the immediate hurdle aligns at 94.19 (2018 high May 23) followed by 94.22 (monthly high Dec.11 2017) and then 94.27 (high Oct.5 2017).