US Dollar Index under pressure near 97.40, looks to CPI

• The index stays on the defensive near 97.40.
• US-China new round of tariffs kicks in today.
• US inflation figures tracked by the CPI next of relevance.

The US Dollar Index (DXY), which gauges the greenback vs. its main rivals, is struggling to gather upside traction at the end of the week and remains stuck in the 97.40 region.

US Dollar Index looks to trade, data

The index is losing ground for the second straight session today, coming under selling pressure amidst rising speculations on the US-China trade front.

In fact, price action in the global markets will closely follow events on the trade scenario, as Chinese and US negotiators will resume trade talks today according to the White House. On Thursday, China reiterated it stays ready to respond to any outcome from the talks.

Later in the day, all the attention will be on the release of US inflation figures measured by the CPI for the month of April along with the speech by FOMC’s L.Brainard (permanent voter, dovish) at the Fed Community Development Conference, while Atlanta Fed R.Bostic (2021 voter, centrist) will discuss on the Economic Outlook and NY Fed J.Williams (permanent voter, centrist) speaks at Bronx Bankers Breakfast.

What to look for around USD

The centre of the debate for the greenback has shifted to the US-China trade dispute, although a high degree of uncertainty as well as scepticism among investors seem to prevail for the time being. On another direction, the lack of traction in US inflation – and concerns among Fed members – currently challenges the continuation of the recent up move in DXY. Dips in the buck, however, are seen shallow as overseas weakness, the safe haven appeal, favourable yield spreads vs. the Fed’s G10 peers and the status of global reserve currency keep the constructive bias on the buck unchanged.

US Dollar Index relevant levels

At the moment, the pair is losing 0.03% at 97.39 and a breach of 97.15 (low May 1) would aim for 97.07 (55-day SMA) and finally 96.75 (low Apr.12). On the other hand, the next hurdle aligns at 98.10 (high May 3) seconded by 98.32 (2019 high Apr.25) and then 99.89 (high May 11 2017).