US Dollar tumbles further, 93.00 on sight

The offered bias remains unchanged around the buck and is now dragging the US Dollar Index to the vicinity of the key support at the 93.00 handle.

US Dollar in 4-day lows

DXY continues to shed ground during the first half of the week and extending the rejection from Friday’s peaks near 94.30.

The softer tone in yields of the key US 10-year benchmark are weighing on the buck, as they remain in the lower end of the daily range around 2.35% after climbing as high as the 2.40% neighbourhood on Friday, or fresh multi-month tops.

Despite the drop, USD should remain underpinned by rising bets on a third rate hike by the Federal Reserve in December, while headlines from the Trump’s tax reform proposal should also keep the interest around the buck.

According to CME Group’s FedWatch tool, the probability of higher rates by year-end is now at nearly 87%, always based on Fed Funds futures prices.

US Dollar relevant levels

As of writing the index is losing 0.43% at 93.12 facing the initial support at 92.95 (low Sep.29) seconded by 92.85 (21-day sma) and then 91.01 (2017 low Sep.4). On the upside, a breakout of 94.03 (23.6% Fibo of the 2017 drop) would open the door to 94.27 (high Oct.6) and finally 94.47 (100-day sma).