US Dollar firm, around 98.80 ahead of data

The greenback, when tracked by the US Dollar Index, keeps the firm note during the first half of the week around the 98.80 area.

US Dollar attention to data

The index is advancing for the sixth session in a row today, keeping the area of 8-month tops just below the key barrier at 99.00 the figure.

Expectations of a rate hike by the Federal Reserve at its December meeting continue to lend support to the buck. According to Fed Funds futures prices, CME Group’s FedWatch tool now places the probability of higher rates by end 2016 at nearly 70%, up from 64%.

Recent comments by Chicago Fed C.Evans (2017 voter, dovish) suggested the likeliness of three hikes by end 2017, adding extra oxygen to the USD-rally. However, Evans also added that the pace of rate hikes should be linked with progress in inflation, stressing at the same time that inflation remains ‘too low’ and its outlook appears ‘still quite uncertain’.

In the US data space, the S&P/Case-Shiller index is next on tap followed by the IBD/TIPP Economic Optimism index and Conference Board’s Consumer Confidence for the month of October.

It is worth recalling that USD also remains well underpinned by positioning, as the latest CFTC report showed speculators have increased their net longs to the highest level since December 2015 during the week ended on October 18.

US Dollar relevant levels

The index is up 0.01% at 98.77 and a breakout of 98.83 (high Oct.24) would aim for 99.95 (high Jan.21) and then 100.60 (high Dec.3). On the flip side, the next support lines up at 97.47 (low Oct.12) followed by 97.19 (20-day sma) and finally 95.82 (200-day sma).