US Dollar weaker, challenging the 95.00 handle

• The index turns negative below the 95.00 mark so far.
• Yields of the key US 10-year note trade in session lows in sub-2.96%.
• US Producer Prices dropped for the first time after 18  months.

Tracked by the US Dollar Index (DXY), the greenback remains unable to gather some serious traction and remains stuck within a tight range in the 95.00 neighbourhood.

US Dollar well supported near 95.00

DXY navigates between 95.30 and 95.00 so far today against the backdrop of unclear direction in the global markets and alternating sentiment in the risk appetite trends.

While the US-China trade effervescence remains well and sound, investors shifted their focus to the US docket, where US Producer Prices unexpectedly dropped in August at a monthly 0.1% and advanced at an annualized 2.8%. In the same line, Core prices also disappointed expectations, contracting 0.1% inter-month and gaining 2.3% YoY.

Looking ahead, the greenback should be under scrutiny in light of tomorrow’s ECB and BoE meetings. Consensus, however, sees both central banks sticking to their recent tone and leaving no room for surprises.

US Dollar Index relevant levels

As of writing the index is losing 0.14% at 94.94 facing immediate contention at 94.45 (low Aug.28) seconded by 94.20 (38.2% Fibo of the 2017-2018 drop) and then 94.08 (low Jul.26). On the flip side, a breakout of 95.74 (high Sep.4) would open the door to 96.04 (50% Fibo of the 2017-2018 drop) and finally 96.96 (2018 high Aug.15).