US dollar index back below 101.00, retreats ahead of FOMC meeting

The US dollar moved with a bearish bias all day  and extended losses during the American session, trimming last week gains. A recovery in US Treasuries contributed to the dollar's decline in the market. 

The US Dollar index, which gauges the US dollar against its main competitors, is losing 0.69% on Monday, ahead of the Federal Reserve 2-day meeting that will start tomorrow. The announcement of the decision will be on Wednesday. Market consensus point to a 25 bp hike in the Fed Funds rate target. 

If the Fed delivers as expected, attention would turn to the statement, FOMC staff forecasts, and Yellen’s press conference. The USD could receive a boost if market participants see more rate hikes coming, while if the US central bank signals no more tightening for a while, the greenback could drop, even with a rate hike. 

DXY retreats from relevant resistance 

At the beginning of the day, the US dollar index peaked near the strong resistance located around 101.70 and then turned to the downside. It dropped constantly at a moderate pace. 

During the US session fell below 101.00 and bottomed at 100.80. It was about to end the day hovering around 100.95, where the 20-day moving average currently stands.