The dollar showed much resilience in trading yesterday, despite a softer US ISM manufacturing report here. One of the reasons for that has been the continued climb in bond yields, with 10-year yields in the US rising to 4.49% overnight. It is settling around 4.45% so far today but that is still up 26 bps from last month’s low.
In turn, that is keeping USD/JPY underpinned especially. The pair is now trading up to 161.60 levels and eyeing further gains with pressure continuing to mount on the Japan MOF and BOJ.
Meanwhile, the euro was a focus point amid an opening gap higher yesterday after the first round of the French elections over the weekend. That said, EUR/USD failed to gain much traction and is sitting little changed today at around 1.0730.
The single currency will be in focus again in the session ahead with Eurozone inflation numbers for June on the cards. That said, this is one report that won’t do much to change the outlook for July. It will feed into the narrative for September but we’ll have to wait on the July and August reports as well to make better sense of the trend.
As such, don’t expect much fireworks in the European session ahead.
0900 GMT – Eurozone June preliminary CPI figures0900 GMT – Eurozone May unemployment rate
Besides that, we’ll have central bank speakers featuring Lagarde and Powell as seen here. So, do keep an eye out for that.
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
This article was written by Justin Low at www.forexlive.com.
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