Fed leadership talk pushes Dollar Index down to trend line support

The dollar Index [DXY] fell to support offered by the trend line sloping downwards from the April 10 high and May 11 high as investors priced-in even odds of a neck to neck race between Powell and Warsh as candidates for next year's Fed Chair position.

As FXStreet Analyst Ross Bruland says, " Jerome "Jay" Powell brings deep Wall Street roots to the job from his tenure as a partner at the Carlyle Group from 1997 to 2005. He also is a current voting member of the policymaking Federal Open Market Committee. ". He adds, " Powell looks more ideologically aligned with the Trump administration's fiscal plans, known for advocating for easy rates and reducing bank regulations. This equated to lower US yields. "

At press time, the DXY is trading at 93.36 levels. The index clocked a high of 93.92 levels.

The most important event risk today is the US non-manufacturing release. The number is more important that the ADP as " the employment component of the report has a stronger correlation with non-farm payrolls so we'll be watching that closely as it could erase or exacerbate the market's reaction to NFP."