US Dollar weaker, still above 100.00 ahead of data

The greenback - tracked by the US Dollar Index -  has started the week on the back foot, deflating further from last week’s top around 100.50 although so far managing to keep the trade above the critical 100.00 barrier.

US Dollar looks to data

The index is now easing some ground after last week’s solid rebound from the mid-98.00s (or 4-month lows), always backed by solid results from the US docket and positive comments from Fedspeakers. In fact, FOMC governors seem to coincide that further tightening should be the right move as long as the economy stays on the current track.

Today’s speeches by New York Fed W.Dudley (permanent voter, centrist), Philly Fed P.Harker (voter, hawkish) and Richmond Fed J.Lacker (2018 voter, hawkish) should keep the interest on the buck along with the publication of the key ISM Manufacturing for the month of March.

DXY plummeted following the ‘Trumpcare’ fiasco, although dip-buyers turned up in the mid-98.00s and lifted the index back above the psychological 100.00 handle. Some help also came from the ECB, after officials warned markets that its March statement could have been misinterpreted.

Despite the ongoing correction lower, the buck should stay supported by this week’s Fedspeak and calendar, which also includes the ADP report (Wednesday) and Non-farm Payrolls (Friday).

In the meantime, USD speculative net longs have retreated to the lowest level since early October in the week to March 28 as shown by the latest CFTC report.

US Dollar relevant levels

The index is down 0.08% at 100.34 and a break below 99.50 (low Mar.29) would open the door to 98.92 (low Mar.28) and finally 98.67 (low Mar.27). On the upside, the next hurdle lines up at 100.50 (high Mar.30) followed by 100.58 (100-day sma) and then 100.66 (20-day sma).