US Dollar challenging lows in the 101.30/20

The greenback – gauged by the US Dollar Index – has started the week on a weak note, testing the lower bound of the range in the 101.30/20 band.

US Dollar focus on data, Fed

The buck came under renewed selling pressure on Monday and is extending the softer tone from last Friday’s despite increasing hopes of a rate hike by the Federal Reserve at the March meeting.

In fact, Chief Yellen and several other FOMC governors have coincided that gradual rate hikes (sooner than later) should be appropriate as long as US fundamentals stay on track.

At her speech in Chicago on Friday, Chairwoman J.Yellen said “Indeed, at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate”.

In spite of a rate hike this month remains ‘on the table’, the greenback has eased some ground from recent tops above 102.00 the figure, coming down to test the 101.30/20 band following the opening bell in Euroland on Monday.

Data wise in the US docket, January’s Factory Orders are expected to have expanded at a monthly 1.2% ahead of the speech by Minneapolis Fed N.Kashkari (voter, centrist).

From the speculators’ view, USD net longs continued to retreat during the week ended on February 28 according to the latest CFTC report.

US Dollar relevant levels

The index is retreating 0.09% at 101.26 and a break below 101.22 (low Mar.1) would open the door to 101.07 (20-day sma) and then 100.86 (low Feb.26). On the flip side, the initial up barrier aligns at 101.49 (high Mar.6) followed by 102.17 (high Mar.3) and finally 102.27 (high Mar.2).