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• The index faces some selling pressure and recedes to 103.20.
• Risk appetite regains traction and weighs on the greenback.
• ADP report, weekly Claims, ISM Services next on tap

The greenback comes under further downside pressure and approaches the key 103.00 region when tracked by the USD Index (DXY) on Thursday.
 

USD Index looks at data

The renewed improvement in the risk complex puts the dollar under some mild downside pressure and relegates the index to trade in the proximity of the key support at 103.00 the figure in the wake of the opening bell in Euroland on Thursday.

There are no meaningful changes to the monetary policy front so far, as investors continue to anticipate a 25 bps rate hike by the Federal Reserve at its meeting later in the month. On this, the imminent publication of the Nonfarm Payrolls (Friday) and US inflation figures (July 12) should have their say in the Committee’s decision on rates.

In the US docket, the labor market will take center stage with the publication of the ADP report and the usual weekly Initial Jobless Claims, all preceding the relevant ISM Services and the final print of the S&P Global Services PMI.
 

What to look for around USD

The index keeps the trade above the 103.00 zone as key results from the US calendar are expected later in the session.

Meanwhile, the likelihood of another 25 bps hike at the Fed's upcoming meeting in July remains high, supported by the continued strength of key US fundamentals such as employment and prices.

This view was further bolstered by comments from Fed Chief Powell at the June FOMC event, who referred to the July meeting as "live" and indicated that most of the Committee is prepared to resume the tightening campaign as early as next month.

Key events in the US this week: ADP Employment Change, Balance of Trade, Initial Jobless Claims, Final Services PMI, ISM Services PMI (Thursday) – Nonfarm Payrolls, Unemployment Rate (Friday).

Eminent issues on the back boiler: Persistent debate over a soft/hard landing of the US economy. Terminal Interest rate near the peak vs. speculation of rate cuts in late 2023/early 2024. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China trade conflict.
 

USD Index relevant levels

Now, the index is down 0.07% at 103.27 and faces the next support at 101.92 (monthly low June 16) followed by 100.78 (2023 low April 14), and finally 100.00 (round level). On the upside, the breakout of 103.54 (weekly high June 30) would open the door to 104.69 (monthly high May 31) and then 104.70 (200-day SMA).

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