US Dollar slips below 98, touches lowest level since early November
|Hurt by today's dismal macro data from the United States, the greenback continues to print losses against its competitors, with the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, dropping to its lowest level since Donald Trump's election victory on November 9. At the moment, the index is at 97.97, losing 0.84% on the day.
Although today's Building Permits and Housing Starts data usually don't have a major impact on the FX markets, the fact that they both recorded contractions was good enough of a reason for the investors to continue to sell the USD. On the other hand, Industrial Production in the U.S. expanded 1% in April but couldn't help the greenback limit its losses, suggesting that the markets are looking for excuses to move away from the USD ahead of June's FOMC meeting.
- US: Building permits in April were at 1,229,000, 2.5% below the revised March rate of 1,260,000
- US Industrial Production: Largest gain in three years - Wells Fargo
Despite the weak data, the CME Group FedWatch Tool's probability of a June rate hike remains stable above 73% on Tuesday as the U.S. T-bond yields remain resilient with the 10-year reference losing 0.3% and the 2-year reference staying flat around 1.3%.
Technical outlook
97.60 (Nov. 1 low) could be seen as the first technical support for the index ahead of 97.00 (psychological level) and 96.50 (Oct. 10 low). To the upside, resistances locate at 98.40 (May 8 low), 99 (psychological level) and 99.75 (May 11 high).
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