US Dollar in corrective mode near 93.30

The greenback, tracked by the US Dollar Index, is giving away part of Friday’s strong gains and is now hovering over the 93.30 region.

US Dollar attention to Fedspeak

The index is posting marginal losses today after printing fresh multi-day tops in the 93.60/65 band on Friday, all in response to solid results from the US labour market for the month of July.

In fact, the economy added 222K jobs during last month and the jobless rate ticked lower to 4.3%, while average hourly earnings (a proxy for inflation wage) rose above estimates at an annualized 2.5%.

DXY gained extra ground in tandem with yields in the US money markets. The 10-year reference rose to test 2.29% on Friday, although it is now looking to stabilize in the 2.27% neighbourhood.

In spite of the solid figures from July’s payrolls, expectations of further tightening by the Federal Reserve appear pretty steady, with the probability of a rate hike at the December 13 meeting holding on to the 47%, while the likeliness of such an announcement next month is at 14%.

News from the speculative community saw USD net shorts scaling back to 2-week lows in the week ended on August 1 according to the latest CFTC report.

In the US data space, the Fed’s labor market conditions index is due, although the attention should be on the speeches by FOMC’s dovish governors J.Bullard (St. Louis Fed, 2019 voter) and N.Kashkari (Minneapolis Fed, voter).

US Dollar relevant levels

The index is losing 0.06% at 93.31 and a breakdown of 92.41 (2017 low Jul.31) would aim for 91.88 (2016 low May 3) and finally 91.50 (low Jan.15 2015). On the flip side, the immediate hurdle aligns at 93.64 (high Aug.4) seconded by 94.03 (21-day sma) and then 94.11 (high Jul.26).