Currency markets seek direction
Currency markets content to watch from the sidelines
Currency markets have moved into range-trading mode ahead of tonight’s US data, with US bond yields almost unchanged overnight, and no direction to be gleaned from equity markets either. The dollar index eased slightly by 0.11% overnight but has risen 0.12% to 92.25 this morning, leaving us where we started yesterday.
Unsurprisingly, that has left developed market currencies almost unchanged as well, with EUR/USD steady at 1.1890, GBP/USD at 1.3735, and USD/JPY at 109.65. Key levels remain for EUR/USD at 1.1700 and 1.1925, 1.3675 and 1.3780 for GBP/USD, and 109.00 and 110.00 for USD/JPY.
US dollar pummelled
Surge in risk sentiment sends US dollar reeling
The US dollar wilted overnight before the onslaught of bullish risk sentiment that swept Wall Street after Friday’s Non-Farm Payrolls and the overnight ISM Non-Manufacturing PMI data. The dollar index fell 0.47% to 92.57, although it has recovered slightly in Asia to 92.68. Notably, despite the robust ISM data and aggressive equity rally, US yields drifted lower, undermining US dollar support. The fall overnight leaves the dollar index not far from its 92.50 pivot point, and a daily close below that suggests a deeper retracement to 92.00 initially.
The majors rallied overnight, but the story was as much a weak US dollar one than the dawn of a new day for the likes of the euro and yen. EUR/USD rose 0.44% to 1.1810, and if it closes above 1.1800 this evening, further gains are possible. Euro sentiment, though, will remain clouded by its Covid-19 situation and the potential Ukraine flashpoint.
Higher US yields send dollar upwards
March 15, 2021SharePrint
The US dollar continues to play bond market ping-pong
The direct correlation between moves in US bond yields and the US dollar saw the greenback spike higher after a surprise leap in US long-end bond yields on Friday. The dollar index climbed 0.20% to 91.68 on Friday. The index fell this morning after US 10-year futures climbed (yields fell) but has moved back to unchanged as the bond futures moved into negative territory.
The US dollar’s advance versus the major and commodity currencies on Friday has left the majors drifting in the middle of their weekly ranges. The Australian and New Zealand dollars remain just below their multi-month support lines, while the Canadian dollar has moved out of danger, for now, USD/CAD falling to 1.2480 on Friday. Overall, the G-10 group is almost unchanged in moribund Asian trading.
The US dollar retreats
US dollar dips as inflation concerns ease
The US dollar headed south overnight, unable to hold onto recent gains as inflation fears temporarily subsided as the 30-year bond auction passed without incident, and a fall in US jobless claims turned attention back to recovery. The dollar index fell 0.44% to 91.45, although dollar short-covering has lifted it back to 91.55 in Asia.
EUR/USD negotiated the ECB meeting with aplomb, rising 0.45% to 1.980 overnight, and is seemingly out of the woods for now. A similar story has played out with GBP/USD and USD/JPY. The under-pressure Australian and New Zealand dollars also rallied overnight; both are testing their respective downside breakouts at 0.7805 and 0.7230 today. A close tonight above these levels by AUD/USD and NZD/USD will conclude their downward corrections for now.
US dollar falls on US 3-year auction results - MarketPulse marketpulse.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from marketpulse.com Daily Mail and Mail on Sunday newspapers.