US Dollar retreats from highs, now back near 95.30

The US Dollar Index, which tracks the buck vs. its main competitors, keeps its bullish note intact on Tuesday, now fading the earlier spike to highs near 95.50.

US Dollar focus on rate hike hopes

The index keeps its buoyancy intact today, briefly testing fresh tops near 95.50 albeit surrendering some pips soon afterwards.

Bets on the likeliness of a rate hike by the Fed at the September meeting keep sustaining the upbeat momentum around USD, with the probability of such a scenario at 15% and just over 45% when comes to higher rates in December, all according CME Group’s FedWatch tool based on Fed Funds future prices.

USD has shrugged off dovish comments by FOMC’s L.Brainard on Monday, who advocated for prudence before tightening the monetary policy, while stressing that the Fed would reach its targets on a gradual process.

US Dollar relevant levels

The index is gaining 0.25% at 95.34 facing the immediate hurdle at 95.58 (high Sep.9) followed by 95.84 (50% Fibo of July-August drop) and finally 96.25 (high Sep.1). On the other hand, a breach of 94.81 (support line off 2016 low) would open the door to 94.44 (low Sep.8) and finally 94.05 (low Aug.18).