US Dollar keeps the trade above 101.00

The greenback – tracked by the US Dollar Index – is posting meagre gains at the end of the week, although it manages well to stay above the 101.00 handle for the time being.

US Dollar focus on data

The index rebounded sharply on Thursday following the dovish guidance from the ECB at its meeting, where it kept unchanged the refi rate, announced that the current QE programme will run at least until December 2017 and that the central bank will now buy assets below the deposit rate (-0.4%).

USD has accelerated the bounce after Draghi said the Governing Council has not discussed any ‘tapering’, pouring (very) cold water over investors’ optimism and previous rumours, prompting a deep pullback in EUR/USD and opening the door for the correction higher in the buck.

Other than that, the case for a stronger dollar in the next periods remain well and sound and always backed by expectations of Fed tightening, reflation prospects under Trump’s administration and solid US fundamentals.

Later in the session, the advanced Reuters/Michigan Index is expected to show US Consumer Sentiment has improved to 94.5 for the current month, up from November’s 93.8.

US Dollar relevant levels

The index is advancing 0.05% at 101.16 and a breakout of 101.80 (high Dec.5) would open the door to 101.88 (high Nov.30) and finally 102.12 (2016 high Nov.24). On the other hand, the next support aligns at 100.97 (20-day sma) followed by 99.87 (low Dec.5) and finally 99.49 (low Dec.8).