US Dollar depressed around 91.50, FOMC eyed

The greenback is extending its sell off this week, with the US Dollar Index hovering over the area of weekly lows in the mid-91.00s.

US Dollar focus on the FOMC meeting

The index is down for the second session in a row on Wednesday, probing the area of 91.50 ahead of the FOMC meeting due later in the NA session.

USD remains under pressure, as the White House failed to give further details on the promised tax reform plans, while investors stay wary over the renewed rhetoric of President Trump regarding North Korea (as per his recent speech at the UN).

DXY’s weekly leg lower comes despite quite a moderate rebound of yields in the US money markets, where the 10-year reference is approaching the 2.25% area and extending the bounce off multi-month lows in the 2.01% neighbourhood seen earlier in the month.

Ahead in the session, the Federal Reserve should keep its stance ‘on hold’ at today’s meeting, although market participants will look for any hints regarding the likely timing of the reduction of the Fed’s balance sheet.

Further data releases include existing home sales and the DoE’s weekly report on crude oil stockpiles.

US Dollar relevant levels

As of writing the index is retreating 0.15% at 91.48 and a breakdown of 91.01 (2017 low Sep.8) would open the door to 89.65 (low Dec.25 2014) and finally 87.63 (low Dec.16 2014) On the upside, the initial hurdle aligns at 91.90 (10-da sma) followed by 92.20 (high Sep.18) and then 92.29 (21-day sma).