US Dollar retreats farther from Friday’s 1-1/2 year tops, weaker below 97.00 mark

   “¢   Fed rate hike uncertainty kept the USD bulls on the defensive at the start of a new trading week.
   “¢   Global growth concerns underpin safe-haven demand and might help limit deeper losses, for now.

The greenback, as measured by the US Dollar Index held on the defensive and extended previous session’s late retracement from 1-1/2 year tops.  

With investors looking past Friday’s stronger than expected US monthly retail sales data, uncertainty over the Fed’s rate hike path in 2019 turned out to be one of the key factors prompting some profit-taking at the start of a new trading week.

Recent comments by various Fed officials, including that from the Fed Chair Jerome Powell, have been interpreted as dovish and forced market participants to price in only one hike in 2019 as against the central bank’s median view for three rate increases.  

Meanwhile, fears over the outlook for global growth kept sentiment subdued continued underpinning the greenback’s relative safe-haven status and might help limit deeper corrective slide ahead of this week’s key event risk – the latest FOMC monetary policy update.

The US central bank, at the conclusion of a two-day meeting on Wednesday, is widely expected to hike rates for the fourth time this year. With the hike largely factored in, the Fed’s new economic projections, especially the so-called dot-plot, will play an important role in driving the near-term sentiment surrounding the buck.

Technical levels to watch