The dollar index has dropped 3 pips thus.....>

DOLLAR: The dollar index has dropped 3 pips thus far and sits at 95.82 at

writing. This comes in after DXY added 27 pips Monday, as U.S. Tsy yields rose

(before ebbing back a touch in early Asian hours), alongside a rally in

equities, which was led by tech shares. 

- Muted reaction noted to the latest comments from Fed's Mester as the prev.

hawkish non-voter followed up on her more balanced/cautious addresses made early

Jan, once again citing tighter financial conditions & sentiment as downside

risks. Although Mester ultimately noted that if the economy performs as she

expects, the fed funds rate may need to move "a bit" higher. Meanwhile, the Fed

revealed that Chair Powell & Vice-Chair Clarida had dinner with U.S. Pres Trump

& Tsy Sec Mnuchin Monday. Powell's comments in this setting were consistent with

his remarks at press conference of last week, according to the Fed. 

- Bears look for a fall below 95.57, where the index bottomed yesterday, before

challenging the 200-DMA at 95.35, while bulls eye 95.87, which represents the

21-DMA, followed by yesterday's peak at 95.92. 

- U.S. focus today turns to ISM non-m'fing & Markit services & composite PMIs.