US Dollar hits 94.00 on ECB, daily peaks

• DXY picks up pace on ECB decision.
• US politics back on the radar on Republicans ‘fight’ for tax reform.
• Attention now on Draghi’s press conference.

The US Dollar Index, which gauges the buck vs. its main rivals, gathered unexpected traction after today’s ECB meeting and is now flirting with session tops in the 94.00 neighbourhood.

US Dollar now looks to Draghi

The index has now reverted yesterday’s sharp pullback and is testing weekly peaks in the boundaries of the key 94.00 handle after the ECB left unchanged its benchmark rate.

In addition, the European Central Bank announced it will cut the bond-buying programme to €30 billion/month from January to September 2018, falling in line with previous estimates and somewhat disappointing those who were expecting a more hawkish message.

In the meantime, yields of the key US 10-year reference climbed to fresh multi-month tops in the vicinity of 2.48% on Wednesday, although they found decent support at today’s lows in the 2.41% area so far.

The up move in the buck run out of some steam yesterday after the tax reform proposed by President Trump seems to face more difficulties than initially estimated among Republicans, although everybody in the US Senate agreed on the deadline to pass the legislation by year-end.

In the US data space today, the usual report on the labour market is next on tap followed by pending home sales for the month of September and the speech by Minneapolis Fed N.Kashkari (voter, dovish).

US Dollar relevant levels

As of writing the index is up 0.34% at 94.02 facing the next up barrier at 94.27 (high Oct.6) seconded by 95.90 (38.2% Fibo of the 2017 drop) and finally 96.51 (high Jul.5). On the other hand, a breakdown of 93.51 (10-day sma) would aim for 93.46 (21-day sma) and then 93.06 (low Oct.19).