US Dollar losing the grip, threatens 90.00

• DXY back to the 90.00 neighbourhood.
• US 10-year yields in tops near 2.88%.
• FOMC’s Harker, Kashkari behind correction.

The US Dollar Index (DXY) has retreated from daily highs in the 90.50/60 band and is now poised to challenge the critical support at 90.00 the figure.

US Dollar offered on Fedspeak

The index continues to give away earlier gains after Philly Fed P.Harker said he is looking to two rate hikes throughout this year, although a third raise remains on the cards albeit highly dependent on domestic inflation and financial conditions.

Harker also said that market volatility is unlikely to hit consumer spending, while he has not changed his outlook on economy, policy in light of the recent market effervescence. Harker stressed that a weaker dollar will ultimately lift consumer prices.

USD is losing ground despite yields of the US 10-year note are climbing to the 2.88% area, closer to Monday’s multi-year tops.

In the US data space, initial claims bettered expectations at 221K WoW, taking the 4-week average to 224.5K from 234.5K.

US Dollar relevant levels

As of writing the index is losing 0.25% at 90.08 facing the immediate support at 88.55 (low Feb.2) seconded by 88.42 (2018 low Jan.25) and finally 86.82 (weekly trend line off 72.70). On the flip side, a break above 90.40 (high Feb.7) would target 90.70 (high Jan.22) en route to 90.98 (high Jan.18).