- US Treasury yields moved higher again yesterday, with the 10-year gaining six basis points to trade through 4.6%. The move was prompted by global debt supply and ongoing concerns over inflation and interest rates in the US. This triggered a rally in the greenback, with the dollar index rising by 0.5% to trade at its highest level in around two weeks. The Japanese yen lost ground against the dollar rising through the level that triggered the latest round of intervention.
- The Federal Reserved released its Beige Book overnight which showed that the US economy expanded at a “slight or modest” pace across most regions since early April. It also showed that consumers remain resilient to both higher interest rates and elevated inflation with spending flat to up slightly. Inflation remains a thorn in the Fed’s side, and this was backed up by Atlanta Fed President Raphael Bostic who yesterday said “we still have a ways to go” to curb the price pressures witnessed in recent months.
- The single currency has broken support against the US dollar falling below 1.08 which now acts as resistance. After peaking just below 1.09 at the start of the week, EURUSD broke support at 1.0850 to trade in the high 1.07’s where it is currently consolidating. Month end rebalancing has had an impact on the greenback, and this can also be witnessed in a fall in GBPUSD. Cable has performed well this month, trading at the top of its recent range however the pair fell yesterday to trade as low as 1.2680 this morning.
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