US Dollar holding on to 100.00 ahead of data

The greenback – tracked by the US Dollar Index – seems to have recovered the smile today, so far managing to keep the 100.00 neighbourhood.

US Dollar attention to data

The index has tested and held the critical support at 100.00 the figure for the time being, as the downside pressure around the buck appears alleviated somewhat following a negative start of the week.

US politics has become an unexpected and relevant driver for the greenback since Donald Trump took office, with market participants closely following his steps and looking for further clues on the implementation of pre-electoral promises regarding extra fiscal stimulus in order to boost the economy.

Later in the session, US Manufacturing PMI tracked by Markit is due followed by Existing Home Sales and the API’s weekly report on US crude stockpiles.

In the meantime, the FOMC has entered the ‘blackout period’ ahead of its meeting on February 1. According to CME Group’s FedWatch tool, the probability of a rate hike next week is at 97%, based on Fed Fund futures prices.

US Dollar relevant levels

The index is gaining 0.23% at 100.18 and a breakout of 100.75 (high Jan.23) would aim for 101.29 (55-day sma) and finally 101.71 (high Jan.16). On the downside, the immediate support aligns at 99.88 (low Jan.24) followed by 99.49 (low Dec.8) and then 99.20 (100-day sma).