US Dollar weaker, approaching 101.00

The US Dollar Index (DXY) – which tracks the buck vs. its main rivals – is sharply lower at the beginning of the week, currently looking to regain the 101.00 handle.

US Dollar supported around 100.70/60

The greenback is extending the correction lower after reaching fresh 13-year tops beyond the 102.00 handle during last week, so far retreating for the first week after three consecutive advances.

However, dips in USD should be shallow in light of the broader perspective of higher inflation figures in the US for the coming periods, while the uptrend in US yields keep supporting the case for a stronger buck.

Adding to the above, expectations of a rate hike by the Federal Reserve at the December meeting remain nearly 94% according to CME Group’s FedWatch tool, although this event seems to be already priced in by market participants.

Another positive indicator of the good health of the US economy is the Atlanta Fed GDP Now model forecast, which now sees the economy expanding at an annualized 3.6% during the fourth quarter.

US Dollar relevant levels

The index is down 0.59% at 100.88 and a breakdown of 100.64 (low Nov.25) would open the door to 99.38 (low Nov.14) and finally 99.63 (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).