Dollar Index hits 5-1/2 week low, drops below 100.00

The dollar Index dropped to a 5-1/2 week low of 99.99 in the Asian session on the back of dovish tone from the Fed last week.

Focus on Fed speak

11 Fed officials are scheduled to speak this week. Traders should note that just three weeks back the odds of a 25 bps hike in March were less than 50%. The sudden rise in the rate hike odds was largely due to hawkish talk from the Fed officials.

What it indicates it that Fed officials could turn their back on the last week’s dovish talk and boost rate hike odds and the US dollar. On the contrary, the dollar index could weaken further if the policy makers stress the need to be cautious with rate hikes.

Dollar Index Technical Levels

The index was last seen trading just below 100.00; its lowest level since Feb 7. A break below 99.91 (Feb 7 low) would expose 99.43 (Jan 31 low) and 99.00 (zero levels). On the higher side, breach of resistance at 100.34 (session high) would open doors for 100.60 (5-DMA) and 101.01 (Mar 13 low).