US Dollar accelerates the downside, breaks below 100.00

The greenback – gauged by the US Dollar Index – has now accelerated its weekly correction lower, breaking below the 100.00 handle and testing the 99.90/85 band.

US Dollar weaker ahead of ECB

The index has come under renewed selling pressure today, briefly testing weekly lows near 99.80 recorded on Monday following the Italian referendum.

Despite the current pause in the USD rally, the case for a stronger greenback in the longer run remains well and sound for the time being, as fundamentals for a sustained drop in the buck remain absent.

Furthermore, and supporting the above, market participants have practically priced in a rate hike by the Federal Reserve at its meeting next week and speculations of a Trump-led pick up in inflation expectations in the next periods stay on the rise.

Data wise in the US docket, the usual report on the labour market is only due later in the NA session ahead of tomorrow’s advanced Consumer Sentiment gauge by the Reuters/Michigan index.

The greenback will also remain under pressure in light of the imminent ECB meeting, with consensus expecting the central bank to extend its QE programme beyond March 2017, although attention will also be on any hint of a potential tapering.

US Dollar relevant levels

The index is retreating 0.38% at 99.90 and a break below 99.87 (low Dec.5) would expose 99.75 (38.2% Fibo of the November up move) and finally 99.38 (low Nov.14). On the other hand, the immediate resistance aligns at 100.65 (23.6% Fibo of the November up move) followed by 100.80 (20-day sma) and finally 101.88 (high Nov.30).