US Dollar reclaims 101.00 following the ECB

The US Dollar Index – which measures the buck vs. a basket of its main rivals – has jumped to levels above the 101.00 handle following today’s ECB meeting.

US Dollar supported at 99.50

After a test of lows in the mid-99.00s, the index has rapidly climbed to the 101.00 area, or fresh 3-day tops, in response to the dovish tone at today’s ECB meeting and subsequent press conference by Mario Draghi.

USD has been boosted after Draghi stressed the Governing Council did not discussed any ‘tapering’. Recall that the ECB will reduce its monthly purchases of bonds to €60 billion starting in April 2017 and intended to run at least until end of December 2017.

In addition, the ECB will now buy assets below the deposit rate, alleviating concerns of a potential scarcity of assets that it can purchase, hinting at the same time that the ECB will stay in the markets for a long time.

Back to the US, Initial Claims rose by 258K WoW, taking the 4-Week Average to 252.50K from 251.50K.

Looking to Friday’s docket, advanced US Consumer Sentiment is expected to improve to 94.5 for the current month, up from November’s 93.8.

US Dollar relevant levels

The index is advancing 0.79% at 101.07 facing the next resistance at 101.88 (high Nov.30) followed by 102.12 (2016 high Nov.24). On the downside, a break below 99.50 (low Dec.8) would open the door to 99.38 (low Nov.14) and finally 99.01 (50% of the November up move).