The greenback falls against its G-10 peers as Treasuries have the best day since March after two Federal Reserve members made dovish comments regarding the future of monetary policy in the US.- Fed official Lorie Logan stated that the recent move in long-term Treasury yields may indicate less need for the Federal Reserve to hike interest rates again. Fed Vice Chair Phillip Jefferson also said that he remains aware of the tightening of financial conditions through higher bond yields in evaluating the future path of the central bank’s policy.
The euro is little changed this morning, trading in a tight range between 1.0550-1.0585 against the US Dollar ahead of Italian Industrial Production and ECB’s Villeroy speech later today.
Sterling-dollar is slightly higher but remains trading mid 1.22-1.23 range as investors wait for the BOE to release minutes of the financial policy meeting. EUR/GBP continues to trade in its 1-month range between 0.86-0.87.
China’s onshore and offshore Yuan advanced to their strongest level in a month as investors unwound their dollar positions following dovish comments from two high-profile Fed officials. USD/CNH fell 0.3% to touch 7.2698 and USD/CNY dropped as much as 0.4% to 7.2677, September 15 Low.
The Yen consolidates mid 148-149 against the greenback, after trading near 148 in early Asian session.
Tensions between Israel and Hamas dropped a dose of volatility into the oil market causing bullish oil options to surge in value. WTI dropped 0.5% to $85.94 and Brent 0.4% to $87.76 this morning.
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