Dollar Dips as 10-Year U.S Treasury Pullback
The US dollar dips against its major trading partners early Thursday, just as the 10-year Treasury yield moderates ahead of the release of weekly initial jobless claims and December existing home sales data.
The British pound, Japanese Yen, Euro trade stronger against the United States dollar, even Loonie outperform the most widely accepted global currency today, according to dollar index trackers (DXY).
The U.S. benchmark 10-year note yields edged lower to 1.8379%, off their two-year high of 1.902% reached on Wednesday.
Weekly oil and natural gas stocks and the Philadelphia Fed’s manufacturing index for January will also be released on Thursday. There are no Fed appearances this week due to the quiet period that began on Jan. 15 and will extend through next week’s FOMC meeting on Jan. 25-26.
A quick summary of foreign exchange action heading into Thursday shows that USD-CAD fell to 1.249 from 1.2515 at the Wednesday US close but was up modestly from 1.2475 a day earlier.
The Canada CPI data for December released on Wednesday indicated an acceleration in price pressures from November, particularly for core, adding to the likelihood of a rate increase at next week’s Bank of Canada meeting. Canadian retail sales will be released on Friday.
USD-JPY slipped to 114.2882 from 114.3264 at the Wednesday US close and 114.4958 a day ago. Japan’s trade deficit was smaller than expected in December, according to data reported earlier Thursday.
Parts of Japan, including Tokyo, will be under new COVID-related restrictions starting on Friday that will last through mid-February but are not as restrictive as previous measures. Japanese inflation data will be released on Friday.
EUR-USD fell only slightly to 1.1338 from 1.1342 at the Wednesday US close and was virtually unchanged from 1.1339 a day ago. EU CPI released earlier on Thursday showed only a slight upward revision to the December price data. Consumer confidence data for the EU will be released on Friday.
GBP-USD slipped to 1.3603 from 1.3613 at the Wednesday US close and from 1.3635 a day earlier. There are no data scheduled for the UK on Thursday, so Friday’s UK retail sales data is the next big event.
The Bank of England meets next on Feb. 3 where it is expected to tighten monetary policy further.
That sentiment was boosted by comments from BOE Governor Andrew Bailey Wednesday that it will take longer for inflation pressure to subside than previously expected, adding that the BOE would act to contain rising prices and wages. # Dollar Dips as 10-Year U.S Treasury Pullback
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