US Dollar trims losses, back around 92.70

The greenback, when gauged by the US Dollar Index (DXY), remains on the defensive today although it has managed to bounce off earlier session lows near 92.60.

US Dollar offered post-FOMC

The index has been losing ground since last Friday, when it was rejected from multi-week tops in the 94.30 area in the wake of US payrolls for the month of September.

The down move has been accompanied by a moderate correction lower in yields of the key 10-year benchmark, currently testing daily lows in the 2.32% neighbourhood and shedding around 8 bp since post-payrolls tops around 2.40%.

Market participants perceived as dovish yesterday’s FOMC minutes, as inflation could now stay in low levels for longer, while the Committee gave no clues regarding the Fed’s target for its balance sheet.

In the US data space, the usual report on initial claims is due, seconded by September’s producer prices and speeches by FOMC’s L.Brainard (permanent voter, mega-dovish) and J.Powell (permanent voter, dovish).

US Dollar relevant levels

As of writing the index is losing 0.09% at 92.71 facing the initial support at 92.64 (low Oct.12) seconded by 91.53 (low Sep.20) and then 91.01 (2017 low Sep.4). On the upside, a breakout of 93.42 (10-day sma) would open the door to 94.03 (23.6% Fibo of the 2017 drop) and finally 94.27 (high Oct.6).