US Dollar Index nose-dives to lows near 97.00 on Powell

• DXY lost the grip and challenges the 97.00 support.
• Yields of the 10-year note met some contention near 2.04%.
• Powell expressed concerns that inflation could stay low for longer.

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, is now visiting the area of weekly lows near the 97.00 mark in the wake of Powell’s remarks.

US Dollar Index offered on Powell

The selling mood around the buck has quickly gathered steam and is now encouraging the index to put the 97.00 handle to the test, all after Chief Powell’s remarks before his testimony noted that inflation could persist at current low levels for longer than anticipated.

Powell once again reiterated that the Fed will act accordingly to sustain economic growth, adding that uncertainties stemming from trade tensions and concerns over the world growth keep hurting the outlook.

Chief Powell is expected to testify before the House Financial Services Panel later in the day, while markets’ attention will also be on the release of the FOMC minutes from the June event. The centre of  the debate, as always in past weeks, will gyrate around the probability of further stimulus by the Fed, particularly via lower interest rates.

US Dollar Index relevant levels

At the moment, the pair is retreating 0.35% at 97.16 and a breakdown of 97.09 (100-day SMA) would aim for 96.68 (200-day SMA) and then 96.46 (low Jun.7). On the upside, the next barrier emerges at 97.59 (high Jul.9) followed by 97.80 (monthly high Jun.3) and finally 98.37 (2019 high May 23).