US Dollar inching higher, eyes 82.00

FXstreet.com (Edinburgh) -The US Dollar Index, which tracks the greenback against its major competitors, is recovering from Monday’s sharp sell-off, attempting to regain the 82.00 handle.

DXY hurt by risk appetite

Recall that positive data from the Chinese economy over the weekend and Monday combined with relieving news from the Middle East boosted the risk-on trade at the beginning of the week, triggering a massive exodus from the USD. “A Reuters opinion poll taken since the release of Friday’s disappointing US non-farm payrolls data suggests that the majority of economists expect the Fed to announce a modest $10 bln tapering of its monthly asset purchases at next weeks’ FOMC meeting. This is in tune with our view… Given that the Fed will be wary of spooking risk appetite again, it is likely that the Fed will balance any tapering of QE next week with an ample measure of dovish talk”, commented Jane Foley, Chief Strategist at Scotiabank.

DXY key levels

At the moment the index is up 0.12% at 81.92 with the initial resistance at 82.50 (high Aug.2) followed by 82.67 (high Sep.5) and then 83.02 (high Jul.18). On the flip side, a break below 81.10 (low Aug.27) would expose 80.86 (low Aug.8) and finally 80.75 (low Aug.20).