US Dollar makes a modest recovery, still headed for lowest close in 11 months

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, slumped to its lowest level in 11 months at 94.27 in the early NA session and finally started to consolidate its losses. As of writing, the index is at 94.42, losing 0.53% on the day.

With today's fall, the total loss of the DXY since the beginning of the year exceeded 7%. The loss of momentum in the economic expansion in the U.S. coupled with the rising doubts over the Trump administrations ability to enact tax cuts and infrastructure spending has been forcing investors to turn away from the greenback.

After two Republican senators announced their opposition to the healthcare bill that was going to repeal and replace Obamacare, Trump administration took another heavy hit. Although US President Donald Trump said that Republicans who came out against the plan were not being disloyal, he further added that he was disappointed and they came to a point where they were going to have to wait until Obamacare fails and Democrats come to them.

Commenting on this recent development, Art Hogan, chief market strategist at Wunderlich Securities in New York, "it pushes out the rest of the agenda. It’s hard to do a tax reform in the style that it was campaigned on," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "The healthcare hurdle pushes everything in Trump’s agenda to 2018."

Technical outlook

94.05 (Aug. 18, 2016, low) could be seen as the first technical support for the index ahead of 93.55 (Jun. 20, 2016, low) and 93 (psychological level). On the upside, the initial hurdle aligns at 95 (psychological level/former support) followed by 95.60 (Jul. 14 high) and 96.25 (Jul. 5 high).

Healthcare bill headlines:

• Where now for US policy and markets following healthcare failure? - ING
• US Pres. Trump: Disappointed that Republicans did not repeal and replace Obamacare
• Two Republican Senators say "no" to straight Obamacare repeal - Reuters
• US. Pres. Trump: The Senate must go to a 51 vote majority instead of current 60 votes
• US Pres. Trump: Let ObamaCare fail and then come together and do a great healthcare plan