Forex today: Dollar knocked back a step on falling U.S. yields


  • US dollar takes a hit in risk off markets.
  • Mexico risk, U.S. and Chinese data in focus.

Forex on Friday traded in response to  President Trump's unexpected tariff threat to Mexico which was announced in early Asia sending Us stocks down sharply and making for a risk-off theme across financial and commodity markets. U.S. yields played havoc on the dollar as investors started to factor in rate cuts for the second half of the year. The DXY ended Friday 97.73 and is bleeding to a fresh low of 97.61 while U.S. ten-year yields dropped from 2.18% to 2.13% - (the lowest since September 2017). 

As for data, U.S. personal incomes and spending both rose more than expected in April and the core PCE inflation gauge posted a modest rebound in April rising 0.25%; "that follows a tepid +0.03%, +0.04% and +0.05% in Jan, Feb and March respectively, providing some early support for the Fed’s view that recent low inflation has been transitory," analysts at Westpac argued. 

As for the Mexico risk, the Trump administration has underlined their demands since the initial Tweet from Trump and Mexico’s president on Saturday hinted his country could tighten migration controls to defuse the threat to impose tariffs on Mexican goods. Mexico’s president said he expected “good results” from talks planned in Washington next week - which should be risk-positive, but judging by the stock index futures performances today on the open, investors are staying with the risk-off theme, likely taking a heed of warning from last week's Chinese economic data still, whereby China’s official manufacturing PMI fell to 49.4 indicating that activity is contracting.

Currency's performances

 

  • EUR/USD climbed from 1.1130 to 1.1170. 
  • GBP/USD firmed up within a volatile trade to 1.2644 from a cent lower.
  • USD/JPY dropped from 109.00 to 108.28  for a five-month low – (The yen was the best performer on the day). 
  • AUD climbed from 0.6905 to 0.6935/40, despite the risk-off mood and the RBA this week. 
  • NZD also rose, from 0.6495 to 0.6547. 
  • AUD/NZD dropped from 1.0630 to 1.0600.

Key notes from Wall Street 

Wall Street closes in the red following a series of bearish inputs

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD tumbles to around 1.1650 amid a souring market mood

EUR/USD is trading around 1.1650, despite update eurozone GDP, The euro is under pressure amid covid-related lockdowns and uncertainty about the US elections. US personal income beat expectations with 0.9%.

EUR/USD News

GBP/USD hovers over 1.29 amid fears of a UK lockdown

GBP/USD is trading above 1.29, off the lows as markets bounce. Fears of a nationwide lockdown loom large, as UK covid cases are rising. Brexit negotiations are also eyed.

GBP/USD News

XAU/USD trims losses and approaches $1,900

Gold futures have bounced up from $1,860 lows, returning to $1,885 area, buoyed by a slightly brighter market mood on Friday which has eased safe-haven demand for the US dollar.

Gold News

Canada: Real GDP grows by 1.2% in August vs. 0.9% expected

The economic activity in Canada expanded by 1.2% on a monthly basis in August, the data published by Statistics Canada showed on Friday. This print followed July's growth of 3.1% (revised from 3%) and beat the market expectation of 0.9%.

Read more

WTI remains near $35 multi-month lows after Baker Hughes’ report

Front-month WTI futures remain near multi-month lows, at $35.35, set for an 11% weekly drop as the release of the Baker Hughes oil rigs data has failed to offer support.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures