US Dollar picking up pace, retakes 100.00

The greenback – gauged by the US Dollar Index – is trading on a firm note on Thursday, currently managing to regain the key 100.00 barrier.

US Dollar attention on US data, Trump

After bottoming out in fresh 7-week lows around 99.80 in early trade, the index has gathered some attention and is now back in the 100.00 neighbourhood.

USD is extending its erratic performance so far this week, always driven by the renewed and so far broad-based selling pressure in response to comments by President D.Trump, (expected) correction from speculative positioning and the persistent unwind of the reflation trade (curiously, this was the original catalyst of the USD rally to the vicinity of 104.00 the figure).

However, US yields have recovered the smile in recent sessions, trading in multi week tops and somewhat slowing down the sell-off in the buck. In the longer run, solid US fundamentals, prospects of further tightening by the Federal Reserve (vs. a continuation of the accommodative stance from its central banks peers) and the likeliness of extra fiscal stimulus under the Trump administration all add to the case of a stronger USD in the months to come.

In the US data space, Initial Claims are due followed by New Home Sales, Trade Balance figures and Markit’s Services PMI.

US Dollar relevant levels

The index is gaining 0.10% at 100.01 and a breakout of 100.39 (high Jan.24) would target 100.75 (high Jan.23) en route to 101.37 (55-day sma). On the downside, the immediate support aligns at 99.77 (low Jan.26) followed by 99.49 (low Dec.8) and then 99.30 (100-day sma).