US Dollar down smalls near 92.50, Fedspeak eyed

Tracked by the US Dollar Index (DXY), the buck so far manages to keep the trade in the mid-92.00s albeit trading slightly into the red territory.

US Dollar looks to data, Fedspeak

The index started the week on a weak note following Friday’s rebound and after US payrolls came in below expectations in August (156K).

In addition, heightened geopolitical risks on North Korea headlines have been keeping the demand for the greenback subdued so far while lending extra support to safe havens like CHF and JPY.

The broader picture for the buck remains neutral/bearish in the second half of the year, always against the backdrop of uncertainty in the US political arena and unabated skepticism on the ability of the Trump’s administration to deliver a tax reform plan and other (promised) fiscal stimulus. In the near term, markets are not yet paying attention to the ‘debt ceiling’, another issue that could be a potential source of USD-weakness if not dealt with in time.

Data wise today, July’s factory orders are next on tap along with speeches by FOMC’s L.Brainard (permanent voter, dovish), Dallas Fed R.Kaplan (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish).

US Dollar relevant levels

As of writing the index is retreating 0.10% at 92.48 and a break below 92.10 (low Sep.1) would target 91.62 (2017 low Aug.29) en route to 91.51 (low Jan.15 2015). On the upside, the next hurdle is located at 92.71 (10-day sma) seconded by 93.11 (21-day sma) and finally 93.35 (high Aug.31).