US Dollar treading water above 93.00

The US Dollar Index – which measures the buck vs. its main rival currencies – keeps the upbeat tone well and sound so far on Monday, currently in a sideline theme above the key 93.00 handle.

US Dollar underpinned by yields, Yellen

The index is up for the third consecutive day at the beginning of the week, adding to the recent bounce off Friday’s lows in the 92.80/75 band and managing to retake and surpass the critical 93.00 mark.

The positive momentum in DXY has been sustained by today’s healthy recovery in yields of the key US 10-year, which have so far recovered the 2.30% neighbourhood following the recent brief test of sub-2.28% levels.

Adding to the sentiment surrounding the greenback, Chair J.Yellen stressed on Sunday that solid US labour market and the strong economy calls for further monetary tightening in spite of the lack of traction in consumer prices, all reinforcing the case for a third rate hike by the Fed at the December meeting.

In the data space, the NY Empire State manufacturing index surpassed prior surveys for the current month, coming in at 30.20 (vs. 20.70 initially estimated).

Still around USD, the speculative community increased the net short positions to 2-week tops in the week ended on October 10, according to the latest CFTC report.

US Dollar relevant levels

As of writing the index is gaining 0.17% at 93.08 and a break above 93.41 (10-day sma) would open the door to 94.03 (23.6% Fibo of the 2017 drop) and finally 94.27 (high Oct.6). On the downside, the immediate support lines up at 92.80 (low Oct.12) seconded by 91.53 (low Sep.20) and then 91.01 (2017 low Sep.4).