US Dollar Index looks offered, breaches the 100.00 mark ahead of Powell

• The selloff in the index remains well and sound below 100.00.
• US yields regain some composure ahead of Powell.
• Chief Powell, Initial Claims, Philly Fed Index next of note in the docket.

The sentiment around the greenback deteriorates further and drags the US Dollar Index (DXY) back below the 100.00 level on Thursday.

US Dollar Index weaker, looks to Powell, data

The index sheds ground for the second straight session and returns to the sub-100.00 levels on Thursday. The abrupt move lower in the dollar came after ECB officials opened the door to a probable interest rate hike by July.

The corrective move in the buck comes amidst the resumption of the upside traction in US yields across the curve, leaving behind Wednesday’s daily retracement.

All the attention is expected to be on Chair Powell, who will give Welcoming Remarks at the Volcker Alliance and Penn Institute for Urban Research Special Briefing. Powell will also speak on The Global Economy at the IMF Debate on the Global Economy.

Additionally, the usual weekly Claims, the Philly Fed Index and the CB Leading Index are also due later in the NA calendar.

What to look for around USD

The dollar faces renewed selling pressure and breaks below the key support at the 100.00 yardstick. So far, the greenback’s price action continues to be dictated by the likeliness of a tighter rate path by the Fed as well as geopolitics. In addition, the case for a stronger dollar also remains well propped up by high US yields and the solid performance of the US economy.

Key events in the US this week: IMF World/Bank Spring Meetings, Initial Claims, Philly Fed Index, Fed Powell (Thursday) - IMF World/Bank Spring Meetings, Flash Services/Manufacturing PMIs (Friday).

Eminent issues on the back boiler: Escalating geopolitical effervescence vs. Russia and China. Fed’s rate path this year. US-China trade conflict. Future of Biden’s Build Back Better plan.

US Dollar Index relevant levels

Now, the index is retreating 0.42% at 99.92 and faces initial contention at 99.57 (weekly low April 14) followed by 97.68 (weekly low March 30) and then 97.18 (100-day SMA). On the flip side, the breakout of 101.02 (2022 high April 19) would open the door to 101.91 (high March 25 2020) and finally 102.99 (2020 high March 20).