US Dollar struggles for direction near 99.50

The US Dollar Index – which tracks the buck vs. its main peers – is alternating gains with losses in the second half of the week around the mid-99.00s.

US Dollar looks to data

The index is losing ground for the first time since Monday, consolidating the recent breakout of the key 99.00 barrier and extending the bounce off 2017 lows around 98.30 seen at the beginning of the week.

Absent relevant events or data releases, the buck has managed to derive support from the upbeat report on the US labour market for the month of April, hawkish Fedspeak and rising speculations of further tightening by the Fed at its meeting next month. All echoing on a better performance of yields in the US money markets, where the 10-year reference is hovering monthly peaks around 2.40%.

Later in the session, the weekly report on Initial Claims is due along with April’s Producer Prices and speeches by Chicago Fed C.Evans (voter, centrist) and New York Fed W.Dudley (permanent voter, centrist).

US Dollar relevant levels

The index is losing 0.04% at 99.46 and a break below 99.26 (20-day sma) would open the door to 99.14 (12-month support line) and then 99.05 (23.6% Fibo of the April-May drop). On the upside, the next hurdle lines up at 99.61 (high May 10) ahead of 99.81 (50% Fibo of the April-May drop) and finally 99.94 (high Apr.21).