US Dollar Index trims losses, back above 92.00

• US recovers after a sharp slide that followed comments by Chinese officials. 
• DXY holds above 92.00 and trims losses 

The US dollar rose across the board during the American session. The greenback stabilized in Wall Street and then started to recover ground. It erased most of the losses and the tone changed dramatically from previous hours. 

News that Chinese officials were planning to cut or halt purchases of US government bonds triggered a USD sell-off and sent yields sharply higher. The US Dollar Index (spot) bottomed at 91.90. From the lows, it bounced and during the last hours accelerated the recovery. It was trading at 92.25, down just 0.28% for the day. 

US yields are consolidating at monthly highs. The 10-year reached 2.59%, highest since March and was holding near the top. The Dow Jones was falling 0.10% after trimming losses. Gold peaked earlier at $1,327/oz and then dropped back under $1,320. 

Levels to watch 

DXY is at session highs but still far from yesterday’s close. The immediate resistance is seen at 92.40, followed by 92.55 (Dec 10 high) and 92.65 (Dec 9 high). On the flip side, a consolidation below 92.00 would open the doors for a test of January lows that lie at 91.80.