US Dollar sticks to daily gains above 97
After reaching its daily high at 97.20 The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, has been trading in a relatively tight range, consolidating its daily gains. As of writing, the index was at 97.05, up 0.1% on the day.
Although the index was able to rise following the solid weekly jobless claims data from the U.S., the positive impact on the greenback was countered by the dismal trade balance data. Despite a small increase (1K) for the week ending May 19, the 4-week average of jobless claims fell to its lost level since 1973 at 232,750.
- US: Weekly initial claims was 234,000, an increase of 1,000 from the previous week
- US: The international trade deficit was $67.6 billion in April
Later in the session, Lael Brainard, a member of the Board of Governors of the Fed, spoke at a panel but didn't comment on yesterday's meeting minutes nor the current state of the economy in the U.S.
- Fed's Brainard: Upward revisions to global growth will continue
The economic calendar won't be offering any data that could potentially impact the greenback's price movement until the preliminary GDP for the first quarter of 2017 is released later in the NA session. The markets expect the annualized growth rate to improve to 0.9% from 0.7%.
Technical outlook
97 (psychological level) could be seen as the immediate support before 96.70 (May 23 low and, 95.90 (Nov. 11 low). To the upside, resistances align at 97.35 (May 25 high), 98 (May 18 high/psychological level) and 98.75 (May 16 high).
- USD index relinquishing overvaluation – Westpac