US Dollar bounces off lows, back around 100.00

After a brief dip to lows near 99.80, the US Dollar Index has now regained the 100.00 neighbourhood.

US Dollar well supported near 99.80

The index remains entrenched in the negative territory so far on Wednesday, although it has managed to leave the area of session lows near 99.80 and return to the key barrier at the 100.00 handle.

Market sentiment around the buck remains bearish nonetheless, at least in the near term, in response to the dovish stance from President Trump regarding the Dollar.

Recall that Trump emphasized last week that a strong currency remains a headwind for the export sector. Those comments have taken an unexpectedly broader perspective, as they originally pointed to the Dollar and the Renminbi in the context of the US-China trade.

In the longer run, however, it remains to be seen whether Trump’s wishes of a lower USD are compatible with an expected looser fiscal policy and a more likely tighter monetary policy (via faster rate hikes).

Nothing in terms of data releases today in the US docket, while New Home Sales (Thursday) and advanced Q4 GDP figures and January’s final Reuters/Michigan index (Friday) are expected to grab all the attention.

US Dollar relevant levels

The index is losing 0.17% at 100.10 facing the immediate support at 99.81 (low Jan.25) followed by 99.49 (low Dec.8) and then 99.25 (100-day sma). On the oher hand, a breakout of 100.39 (high Jan.24) would target 100.75 (high Jan.23) en route to 101.33 (55-day sma).