Forexlive Americas FX news wrap: US dollar slump continues as yields slide | Forexlive
Markets:
- Gold up $6 to $1871
- US 10-year yields down 4 bps to 3.53%
- WTI crude up $1.05 to $74.82
- S&P 500 up 2 points to 3918
- EUR leads, USD lags
Midway through trading there was a tidy narrative of risk appetite and dollar weakness in the aftermath of the soft ISM services report on Friday but stocks gave back their gains late and the dollar gave a bit back as well. The thinking is that market participants are anxious about a hawkish speech from Powell tomorrow and that makes some sense, as he’s been consistently hawkish.
Oil was the first to indicate uneasiness as a strong gain turned into a moderate one. Bonds turned at the same time as higher yields turned lower and the 10-year tested 3.50%.
Rather than reversing, the dollar trade was more about flattening. The lows for the dollar came just after the London fix and it was generally sideways from there before some late selling as US equities turned red.
The euro and pound were particularly strong with the latter helped by some hawkish comments from the BOE’s top economist. EUR/USD did some technical damage in rising above the December highs to the best levels since June. The peak so far is 1.0760 but the pair gave back 25 pips late.