US Dollar Index clings to 98.00, looks to FOMC minutes

• The index hovers around the 98.00 handle so far.
• Yields of the US 10-year note reclaimed the 2.43% handle.
• FOMC minutes, Fedspeak next of note in the docket.

Measured by the US Dollar Index (DXY), the greenback manages well to keep the trade at/above the key barrier at 98.00 the figure for the time being.

US Dollar Index focused on trade, FOMC

The broad sentiment around the index remains constructive for yet another session on Wednesday, navigating the area of weekly highs while investors’ attention remains mainly focused on trade concerns.

Still around trade, news that the White House lifted the ban on Chinese tech giant Huawei for 90 days on Tuesday boosted tech stocks in Wall St. and brought in some respite among traders following a couple of sessions in red figures.

Further out, Chicago Fed C.Evans ruled out yesterday negative interest rates as a potential tool to be used in the future. On his turn, Boston Fed E.Rosengren regarded the lack of traction in inflation as temporary, while he noted that trade uncertainty should have a modest impact on the economy.

Later in the session, the FOMC will publish its minutes from the last meeting in what will be the salient event today. In addition, NY Fed J.Williams (permanent voter, centrist) will host an Economic Press Briefing and Atlanta Fed R.Bostic (2021 voter, centrist) will make Opening Remarks at the Dallas Fed Conference.

What to look for around USD

Prices of the WTI appear to have met some moderate resistance in the $63.70 region, or multi-day peaks. In the broader picture, and supporting prices, appear rising US-Iran tensions, turmoil in Libya, the so-called ‘Saudi put’ and the ongoing OPEC+ deal to cut oil output. However, US-China trade concerns remain far from abated despite the lack of fresh headlines as of late and emerge as the main hurdle for a more serious advance in crude oil.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.04% at 98.06 and faces the next up barrier at 98.13 (high May 21) seconded by 98.32 (2019 high Apr.25) and finally 98.97 (78.6% Fibo of the 2017-2018 drop). On the other hand, a break below 97.70 (21-day SMA) would open the door for 97.25 (55-day SMA) and then 97.03 (low May 13).