US Dollar decline halted near 99.10

The greenback – measured by the US Dollar Index – has quickly dropped to 3-day lows in the wake of the US docket, finding some support in the 99.10 area for the time being.

US Dollar offered on gloomy CPI

The index rapidly fell from the 99.60 area to fresh session lows around 99.10 after inflation figures rose less than expected during April, with the CPI rising at an annualized 2.2% (vs. March’s 2.4% gain). Core prices also followed suit, up 1.9% over the last twelve months, down from 2.0%.

Adding to the selling mood, April’s Retail Sales have also come in below estimates, expanding at a monthly 0.4% (vs. 0.6% forecasted).

On the brighter side, advanced Consumer Sentiment gauged by the Reuters/Michigan Index is seen rising to 97.7 for the current month vs. April’s 97.0. Consumer Expectations also came in on the strong side, expected to rise to 88.1 from 87.0.

Yields in the US money markets continue to suffer the lacklustre results, with the 10-year reference tumbling to fresh daily lows in sub-2.34% levels amidst some correction lower in markets’ expectations of a rate hike by the Fed at the June meeting.

Despite the current violent correction, USD stays on the positive territory so far this week, up for the first time after four consecutive weekly pullbacks.

US Dollar relevant levels

The index is losing 0.41% at 99.12 and a break below 99.05 (23.6% Fibo of the April-May drop) would open the door to 98.96 (low May 9) and then 98.36 (2017 low May 8). 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).