US Dollar off highs, returns below 95.00 on U-Mich, Trump

• US consumer sentiment a tad lower in October.
• Rumours said Trump could favour Powell.
• DXY tests 95.00, fresh 3-month tops.

Tracked by the US Dollar Index, the greenback is now surrendering part of its initial gains and returning to levels below the key 95.00 up barrier.

US Dollar gives away gains on rumours, data

The index lost some upside momentum on Friday after US consumer confidence came in below estimates for the current month at 100.7. In addition, consumer expectations also missed forecasts at 90.5, while inflation expectations ticked higher to 2.4% vs. September’s 2.3%.

Adding to the current bout of selling interest surrounding the buck, rumours cited President Trump would favour FOMC’s (dovish) candidate Jerome Powell against John Taylor to lead the Federal Reserve when Janet Yellen finishes her term in February.

The rumours are forcing US 10-year yields to drop to session lows in the boundaries of the 2.43% level and dragging DXY to the 94.85/80 band, albeit keeping the positive note for the day.

Earlier in the session, advanced US GDP figures surprised to the upside, showing an expected expansion of 3.0% during the July-September period.

US Dollar relevant levels

As of writing the index is gaining 0.27% at 94.90 and a breakout of 95.15 (high Oct.27) would target 95.90 (38.2% Fibo of the 2017 drop) en route to 96.51 (high Jul.5). On the downside, the immediate support aligns at 94.27 (high Oct.6) followed by 94.03 (23.6% Fibo of the 2017 drop) and finally 93.81 (10-day sma).