US Dollar sticks to its weekly gains above 101.00

The US Dollar Index – which measures the buck against a basket of its main rivals – remains in the negative ground so far today, although it has managed to rebound from lows.

US Dollar weaker on profit taking, soft data

The pair is retreating for the second consecutive session so far, although it manages well to extend its positive streak for the third week, including a fresh 13-year tops above the 102.00 limestone.

Adding to the offered bias, today’s data releases in the US economy did not help the dollar either, as October’s advanced trade balance figures showed a wider-than-expected deficit and Markit’s preliminary Services PMI expects a lower reading for the current month.

Expectations of a Fed’s rate hike seem to be utterly priced in by market participants for the time being, with CME Group’s FedWatch tool now seeing the probability of such event at nearly 94% based on Fed Funds futures prices.

However, markets’ attention should start to shift their focus on the potential measures to be implemented by D.Trump following his plans of a looser fiscal policy (which should render in higher inflation expectations and hence rate hikes at a faster pace into the future).

US Dollar relevant levels

The index is down 0.28% at 101.42 and a breakdown of 100.71 (low Nov.22) would open the door to 99.38 (low Nov.14) and finally 99.50 (20-day sma). On the other hand, the next hurdle lines up at 102.19 (monthly high Apr.2003) ahead of 102.68 (monthly high March 2003).

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