Search ForexCrunch
  • The index accelerates the downside to the mid-94.00s.
  • Yields of the US 10-year note leap to highs beyond the 2.87% handle.
  • US President Trump said further tariffs on Chinese imports are likely.

The US Dollar Index (DXY), which tracks the buck vs. a basket of its main rivals, is intensifying the daily correction lower to the 94.55/50 band.

US Dollar turns negative for the week

The index is prolonging the drop after clinching fresh 2018 highs beyond 95.60 on Thursday. However, the decline appears to have found some contention in the proximity of 94.50, where sits the support line off April’s low around 89.40.

The down move in the buck has gathered traction on the back of news citing the Bank of Japan could discuss a change in its monetary policy at the next meeting later in the month. According to latest news, the central bank could debate modifying the yield curve target.

Further headlines around the buck saw San Francisco Fed’s J.Bullard ruling out any impact on Fed decisions from recent comments by President Trump.

It is worth recalling that Trump threatened to impose $505 billion tariffs on Chinese imports, while EU officials called for retaliatory measures against US tariffs on autos.

US Dollar relevant levels

As of writing the index is down 0.62% at 94.59 and a breach of 94.30 (low Jul.17) would target 94.19 (55-day sma) en route to 93.71 (low Jul.9). On the upside, the next hurdle is located at 95.65 (2018 high Jul.19) followed by 96.04 (50% Fibo of the 2017-2018 drop) and finally 96.51 (monthly high Jul.5 2017).