US Dollar stays on the defensive near 93.40
- The greenback started the week on the wrong footing.
- Failed G7 meeting weighs on USD-sentiment so far today.
- US 10-year yields tests tops near 2.97%.
Tracked by the US Dollar Index (DXY), the greenback is giving away part of last Friday’s gains and is now meandering in the 93.50/45 band.
US Dollar looks to FOMC, Trump
The index is attempting to consolidate in the lower end of the recent range in the mid-93.00s, all following some weakness emerged after the G7 fiasco in Canada and with markets’ attention on the imminent Trump-Kim meeting (Tuesday).
The squeeze lower in the index comes along a rebound in yields of the key US 10-year note to the 2.97% neighbourhood following a test of sub-2.90% levels in past hours, all in a context of increasing risk-on sentiment.
News from the speculative community noted USD net longs increased to the highest level since early July 2017 in the week to June 5, as per the latest CFTC report.
In the data space, inflation figures tracked by the CPI will be published tomorrow, although the salient event will be the FOMC meeting on Wednesday, where the Committee is expected to hike rates by 25 bps.
US Dollar relevant levels
As of writing the index is losing 0.19% at 93.37 and a breakdown of 93.22 (low Jun.7) would aim for 92.80 (38.2% Fibo of the April-June up move) and then 92.24 (low May 13). On the upside, the initial up barrier emerges at 93.75 (21-day sma) followed by 93.91 921-day sma) and finally 94.45 (high May 31).
