US Dollar stays subdued below 89.00 ahead of FOMC

• DXY remains in red in sub-89.00 levels.
• ADP surprised to the upside at 234K.
• FOMC expected to show a hawkish statement.

The greenback, in terms of the US Dollar Index (DXY), continues to trade on the defensive today, still unable to retake the 89.00 handle on a sustainable fashion.

US Dollar focused on Fed

The buck has resumed the prevailing bearish trend after a positive session on Monday, now down for the second session in a row ahead of the upcoming FOMC gathering.

Auspicious ADP report in January (234K) did nothing to move the USD-dial away from the red ground today, falling in line with the reaction after Trump’s SOTU speech late on Tuesday.

Looking ahead, Yellen’s last FOMC meeting is expected to deliver a somewhat hawkish message later today, with consensus among investors pointing to three rate hikes this year at the March, June and December meetings.

US Dollar relevant levels

As of writing the index is retreating 0.36% at 88.87 and a break below 88.81 (low Jan.31) would open the door to 88.42 (2018 low Jan.25) and finally 87.64 (low Dec.16 2014). On the flip side, the next up barrier lines up at 90.70 (high Jan.22) followed by 90.98 (high Jan.18) and then 92.64 (high Jan.9).