US Dollar drops further, tests 101.00

The US Dollar Index – which tracks the buck vs. its main rivals – met extra selling pressure on Monday and is currently challenging the key 101.00 handle.

US Dollar weaker ahead of FOMC

The index is reverting two consecutive sessions with gains albeit it still manages to keep the trade above 101.00 the figure.

USD is giving away part of the recent advance to the vicinity of 101.80, as market participants have already digested last Friday’s auspicious results from US Consumer Sentiment and cautiousness has started to take over sentiment in light of the imminent FOMC meeting (Wednesday).

Consensus among investors have practically priced in a 25 bp rate hike this week, although the Dollar will remain in centre stage as market participants will closely follow the Fed’s statement and Yellen’s press conference in order to look for any hint of the next steps by the Committee regarding monetary policy.

In the meantime, the latest CFTC report showed the upbeat momentum in USD remains well underpinned on the positioning side, as speculative net longs have climbed at the highest level since August 2015 on the week to December 6.

US Dollar relevant levels

The index is losing 0.37% at 101.22 and a breakdown of 101.06 (20-day sma) would aim for 99.87 (low Dec.5) and finally 99.49 (low Dec.8). On the flip side, the initial hurdle is located at 101.80 (high Dec.5) ahead of 101.88 (high Nov.30) and finally 102.12 (2016 high Nov.24).