The US Dollar (USD) is having a lot to digest this morning. Spanish inflation fell less than expected, making the Euro outperform the Greenback, while the Swedish Riksbank dropped the ball with a dovish hike, prompting the Swedish Krona to depreciate substantially against the US Dollar. US Federal Reserve (Fed) Chairman Jerome Powell already hit the stage at the start of the European session and made a carbon print of what he said on Wednesday by again committing to two more interest-rate hikes, possibly consecutive ones. As if that was not enough, the People’s Bank of China (PBoC) fixed its Yuan again firmly stronger against the US Dollar, in a one-trick-pony as seen on Tuesday. With Powell already out of the way, traders will be fully focused on two batches of economic data to come out. Main attention will be at 12:30 GMT with the final estimate of the US Gross Domestic Product (GDP) for Q1, which is expected to come in at an annualized rate of 1.3%, unchanged from the previous estimate. The GDP Price Index is also seen stable at 4.2%. At that same time, the US Labor Department will publish the weekly Jobless Claims data, with Initial Claims expected at 265K, from 264K previously, and the Continuing Jobless Claims are expected to head higher from 1.759 million to 1.765 million.

The US Dollar trades against most peers in the green, with only three main outliers to mention: the Japanese Yen (USD/JPY), the Australian Dollar (USD/AUD), and the New Zealand Dollar (USD/NZD). The move comes after a very eventful morning in Europe where inflation flared up and the Swedish Riksbank committed to defending its currency. That triggered a knee-jerk reaction and pulled the US Dollar Index (DXY) back down below 103.00, though the DXY is recovering from earlier pulldown moves. On the upside, the 100-day Simple Moving Average (SMA) briefly got pierced through at 103.04 and next saw the DXY retreat by a stronger Euro and Yuan. It looks like those pairs are reversing again in favor of US Dollar strength and might push the DXY back above 103.00. Once that happens, look for 103.50 as the next key level to the upside. On the downside, the 55-day SMA near 102.67 is up for proving its reliability as a support element after being chopped up that much in the last two weeks. A touch lower, 102.50 will be vital to hold from a psychological point of view. In case the DXY slips below 102.50, more weakness is expected with a full slide to 102.00 and a retest of June’s low at 101.92.