US Dollar erodes gains, challenges 101.00 ahead of ADP

The greenback, in terms of the US Dollar Index (DXY), has surrendered part of its initial gains and is now testing the lower bound of the range near the 101.00 handle.

US Dollar attention to data

The index remains under pressure so far this week, although it seems to have found quite decent support in the 100.70/60 band for the time being.

A mixed tone in European equities following today’s opening bell has prompted sellers to step in once again, prompting USD to give away its initial gains and recede towards the 101.00 neighbourhood.

It all points to quite an interesting session for the buck, as risk appetite trends should be focusing on the OPEC gathering, while key US releases due later in the day should give back the attention to the dollar.

That said, the ADP report is due first (160K exp. in November), seconded by Personal Income/Spending, inflation figures gauged by the PCE, the Chicago Fed PMI and Pending Home Sales, all ahead of the Fed’s Beige Book.

Furthermore, FOMC’s J.Powell (permanent voter, neutral) and Cleveland Fed L.Mester (voter, hawkish) are due to speak during the European evening.

Collaborating with the upbeat momentum around the buck, USD longs have climbed above 72K contracts - the highest level since August 2015 - during the week ended on November 22, taking net longs to to 3-week tops according to the latest CFTC report.

US Dollar relevant levels

The index is up 0.02% at 101.00 facing the next hurdle at 102.19 (monthly high Apr.2003) ahead of 102.68 (monthly high March 2003). On the flip side, a breakdown of 100.64 (low Nov.25) would aim for 99.38 (low Nov.14) and finally 99.84 (20-day sma).