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US Dollar on the defensive near 95.50, US CPI eyed

The greenback, in terms of the US Dollar Index, is trading on the back footing early in the European session although it manages to keep the area around 95.50 for the time being.


US Dollar attention to US docket


Choppy week so far for the index, fading last week’s advance and navigating at shouting distance from multi-month lows in the 95.25/20 band.


Both testimonies by Chief Janet Yellen failed to bring in fresh USD-buyers despite leaving on the table a third rate hike (probable at the December meeting) and reiterating the Fed’s willingness to start reducing its balance sheet at some point in the second half of the year.


However, FOMC’s permanent voter Lael Brainard advocated on Tuesday the need for a more cautious approach when comes to tightening the current monetary conditions in order to clinch the 2% inflation target. Her comments hurt the buck and aggregated extra relevance to today’s releases of June’s inflation figures measured by the CPI.


So, apart from the CPI results, the greenback will stay under pressure as retail sales for the month of June are also due along with the Reuters/Michigan index and the speech by Dallas Fed R.Kaplan (voter, hawkish).


US Dollar relevant levels


The index is losing 0.13% at 95.44 and a breach of 95.25 (low Jul.13) would open the door to 95.22 (2017 low Jun.30) and then 94.95 (low Sep.22 2016). On the upside, the next up barrier emerges at 95.71 (10-day sma) seconded by 96.25 (high Jul.5) and finally 96.32 (high Jun.28).

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