Rising US yields help to underpin dollar bid

The dollar is at the best levels of the day against:

• JPY
• EUR
• GBP
• CAD
• AUD
• NZD

The dollar strength is partly due to the Bank of Japan standing pat. There was some fear in the market (and heavy USD/JPY selling) yesterday on the potential for a pivot. There was also some heavy selling of USD/CHF of the surprise 50 bps hike from the SNB.

Now that those flows have subsided (and reversed in the case of the BOJ), the dollar is back in favor. In addition, US 2-year yields are up to a session high at 3.19%, up from a low of 3.09% just two hours ago.

To spark another leg of strength, USD/JPY will need to get above 135.60, which was Monday’s 24-year high.