Forex today: Dollar mixed, US yields higher, Kiwi top performer, yen worst


  • The Dollar was mixed overnight, with the Yen the worst and the Kiwi the best performer.
  • NZD/USD climbed from 0.6660 to 0.6693, a two-month high.
  • USD/JPY climbed 0.5% to 107.80 on the back of higher US yields.

FX and markets, in general, were somewhat subdued with light data making for a mixed greenback. However, US yields continued to recover following the prior day's Fed less dovish speak. The Federal Reserve speakers continued to talk easier money conditions on Wednesday, with San Francisco Fed president Daly commenting on how uncomfortable she was with the low levels of inflation, concerned over wages growth. As for US yields, the 2-year treasury yield climbed from 1.72% to 1.77% with the 10-year yield rose from 2.00% to 2.05%. 

On the data front, analysts at ANZ explained that the May US durable goods headline of -1.3% was weak and argued that the data provided some push back against a 50bp rate cut by the Fed, and market pricing adjusted accordingly.

As for trade talk, the US Treasury Secretary Mnuchin said the US and China “were about 90% of the way” to a deal. "Note that he was speaking in the past tense and clearly the final 10% was too difficult last month," analysts at Westpac argued. 

Meanwhile, US President Trump crossed the wires and said that the US Fed would be better off with the ECB’s Mario Draghi at the helm. Trump was comparing the Fed to a “stubborn child” and argues that they “blew it” this month when they didn’t cut. "It should be noted that Mr Draghi was less popular with Trump earlier this month when he signalled easier monetary conditions are likely on the way for Europe, with implications for EUR/USD," analysts at ANZ Bank said. 

As for the price action, it left the Euro flat around 1.1370. Cable was net unchanged near 1.2700 by the close of the New York session and the yen was the weakest.  USD/JPY climbed 0.5% to 107.80 on the back of higher US yields. AUD/USD manged to advance on mixed feelings over the forthcoming Xi/Trump summit, extending a six-day rally from 0.6970 to 0.6990/95. The top performer was the Kiwi.  NZD/USD climbed from 0.6660 to 0.6693, a two-month high, following the RBNZ that came as less dovish than expected. 

Key notes from Wall Street

Wall Street benchmarks consolidate lower and the DJIA clings to the 4-HR pivot

Key events ahead 

China May industrial profits (expected April -3.7% for the year, no forecasts).

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