Forexlive Americas FX news wrap: US GDP gets a downgrade, dollar bounces around | Forexlive

Markets:

• WTI crude oil up $1.50 to $75.45
• US 10-year yields down 5 bps to 3.87%
• Gold down $2 to $1822
• JPY leads, GBP lags
• S&P 500 up 20 points to 4019

The mood as North American traders arrived was positive with 10-year yields having rejected 4% on the first test. That ultimately left an outside day on the 10y chart and was embraced by the market with moderate US dollar selling and equity market buying, led by tech.

But it was a smooth ride. The first twist was a strong bid in USD/JPY that ran some stops to the highest levels since December, touching 135.36 but the move faded quickly afterwards in what was ultimately an 85-pip decline. The small swings in bonds contributed to the moves but there was little slow-down, even after a 1.5 bps tail at the 7-year auction.

The risk mood slowly deteriorated around midday in NY with stocks giving back gains but the selling ultimately stabilized and a bid returned. At the same time, dollar sellers arrived in fairly convincing fashion, particularly on a day with little newsflow. Commodity currencies rebounded 30-40 pips to finish fractionally higher on the day.

Cable wasn’t so fortunate as it tested 1.2000 again. That level broke by a handful of pips and the pair found a footing in a rebound to 1.2019 but remains in a vulnerable spot. It was the second day of sales in cable and there’s still a bit of breathing room ahead of the February lows but that could change quickly with PCE on the docket Friday.

The euro was less fortunate as it fell to the lowest since early January but it did steady itself late and finished just below 1.0600. That puts a doji on the chart ahead of what could be a big day to cap the week.