US Dollar down smalls ahead of Comey, around 96.60

The US Dollar Index (DXY) – which tracks the buck vs. a basket of trade-weighed peers – is slightly into the negative territory on Thursday, hovering over the 96.60 region ahead of Comey’s testimony.

US Dollar attention to Comey, ECB

Choppy week for the index so far, now reverting yesterday’s advance although navigating near the area of multi-month lows in the mid-96.00s.

USD has practically retraced the Trump-trade sparked in early November, which included a 15-year tops just below the 104.00 handle on January 3. The momentum around the greenback has been constantly losing ground as markets grew skeptical on the ability of the Trump’s administration to deliver its pre-electoral promises, particularly the ones related to fiscal stimulus.

Today’s testimony by former FBI Chief James Comey before the Senate Intelligence Committee promises to bring in volatility to the buck, opening the door at the same time for a deeper pullback in case the sentiment around President Trump deteriorates further.

In addition, market participants will closely follow the ECB meeting, where the central bank could shift to a more aggressive tone in its statement. However, yesterday’s news citing the ECB could revise lower its inflation forecasts through 2019 and May’s lower-than-expected inflation figures play against this scenario.

In the data space, the usual weekly report on Initial Claims is only due.

US Dollar relevant levels

The index is down 0.03% at 96.64 facing the immediate support at 96.45 (2017 low Jun.7) followed by 95.91 (low Nov.9 2016) and then 94.95 (low Sep.22 2016). On the upside, a break above 96.94 (high Jun.7) would open the door to 97.27 (high Jun.1) and then 97.30 (20-day sma).