US Dollar bounces off lows, retakes 101.80

After bottoming out in the mid-101.00s during early trade, the US Dollar Index (DXY) has managed to erode part of those losses and return to the 101.80 region.

US Dollar weaker ahead of Trump’s presser

The greenback remains on the defensive during the first half of the week, extending the weak start of the new year although finding quite decent support in the mid-101.00s for the time being.

USD remains cautious ahead of the upcoming press conference by US president-elect Donald Trump (Wednesday), trading in the lower end of the recent range after YTD tops in the mid-103.00s seen last week.

Despite the current weakness, the prospects for a stronger buck in the next months remain well and sound, with recent results in the economy showing a solid labour market and a healthy uptrend in inflation. This couples with the expected tightening of the monetary conditions by the Federal Reserve (3 rate hikes forecasted in 2017), which remains supported at the same time by the perspective of a pick up in inflation figures on potential fiscal stimulus under Trump’s administration.

In the data space, the NFIB Business Optimism index surprised to the upside, coming in at 105.8 for the month of December. Later in the session JOLTs Job Openings is due ahead of Wholesale Inventories and the API’s weekly report on US crude oil stockpiles.

US Dollar relevant levels

The index is retreating 0.07% at 101.85 facing the next support at 101.30 (low Jan.6) followed by 100.75 (low Dec.14) and then 100.78 (55-day sma). On the other hand, a break above 102.50 (20-day sma) would target 103.81 (2017 high Jan.4) en route to 107.38 (monthly high Dec.2002).