US Dollar remains on track to close the day below 96

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  • US Pres. Trump reportedly complains about the Fed’s rate hikes.
  • Fed’s Bostic says trade uncertainty could slow down the economic growth.
  • FOMC is scheduled to release its meeting minutes on Wednesday.

The US Dollar Index, which tracks the greenback against a basket of six major currencies, fluctuated in a relatively tight range for the majority of the day before coming under modest selling pressure in the late US afternoon following the reports of President Trump continuing to voice his displeasure regarding the Fed’s monetary policy. The index broke below the 96 mark and touched its lowest level in 10 days at 95.88. As of writing, the index was at 95.90, losing 0.25% on the day.

Citing three people who were present, Bloomberg reported that President Trump complained to donors at a Hamptons fundraiser on Friday saying that he expected his nominee, Jerome Powell, to be a cheap-money Fed chairman, but instead he raised interest rates. 

In the meantime, while speaking at a Chamber of Commerce luncheon on Monday, Atlanta Fed President Raphael Bostic argued that the trade uncertainty was the most significant risk that the economy was facing right now. Commenting on the monetary policy, Bostic explained that the economy didn’t need the monetary stimulus it once did and added that the Fed was worried about the flattening of the yield curve.

On Wednesday, the FOMC is going to publish the minutes of its latest meeting. “We expect the minutes to provide additional information on participants’ concerns regarding US trade policy and the possible downside risk from increased tariffs and softening business sentiment,” Nomura analysts wrote in a recently published report.

Technical outlook

 The initial support for the index aligns at 95.55 (Aug. 10 low) ahead of 95/94.95 (psychological level/50-DMA) and 94.10 (Jul. 26 low). On the upside, resistances could be seen at 96 (psychological level), 96.40 (daily high) and 97 (psychological level/Aug. 15 high).

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