US Dollar pushes lower toward 97 on FOMC minutes

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, came in under a heavy selling pressure after the FOMC meeting minutes and dropped to the 97 handle, erasing the majority of its gains from yesterday. At the moment, the index is at 97.04, down 0.25% on the day.

U.S. Federal reserve policymakers suggested that they need to see more data before confirming that the recent weakness seen in the economic growth was transitory. Only if these expectations are met, the policymakers will go on with the planned rate hikes. They also agreed that the new plan regarding the balance sheet should be announced soon and it would be appropriate to start with reductions this year.

• FOMC minutes: Fed policymakers agreed that details of balance sheet plan should be announced soon

In the past, we have seen that the initial market reaction to FOMC minutes struggled to become sustainable as the investors digested the underlying details of the meeting. Later in the session, Dallas Fed President Kaplan will cross the wires, perhaps commenting on the minutes and providing some fresh insight.

If the index makes a decisive break below 97 (psychological level), it could aim for the index could aim for 96.70 (May 23 low and, 95.90 (Nov. 11 low). To the upside, resistances could be seen at 97.35 (daily high), 98 (May 18 high/psychological level) and 98.75 (May 16 high).