The US Dollar Index is flirting with the 106.00 area at monthly highs. The economic calendar for the Asian and European sessions is empty on Tuesday. Later in the day, the US will release housing and consumer confidence data.
Here is what you need to know on Tuesday, September 26:
The US Dollar Index (DXY) rose to 106.09, reaching the highest level since November, before pulling back to 105.90. The Greenback remains firm, supported by cautious market sentiment and higher US Treasury yields. The 10-year yield climbed to 4.54%, a level not seen since October 2007.
The expectation of high interest rates persisting for longer is based on the resilience of the US economy. Market participants are eagerly awaiting the release of the Federal Reserve's preferred inflation gauge, the Core Personal Consumption Expenditures Price Index, on Friday.
During the American session, the Chinese Yuan consolidated its losses amid ongoing concerns about the Evergrande situation, which will likely continue to be in the spotlight.
EUR/USD posted its lowest close since March, falling below 1.0600 after five consecutive days of decline. The Euro weakened despite European Central Bank (ECB) President Lagarde's comments at the European Parliament, where she mentioned that rates will remain restrictive for as long as necessary. EUR/GBP pulled back from 0.8700 to 0.8670.
The Pound dropped to fresh lows against the US Dollar, briefly reaching levels below 1.2200. The currency is still affected by the Bank of England's dovish stance in its recent policy decision.
USD/JPY broke above 148.50, reaching the highest levels since October and approaching 149.00. Despite concerns about an intervention from Japanese authorities, the pair's rally remains largely unabated.
The Canadian Dollar outperformed on Monday, with USD/CAD modestly falling to 1.3450. In contrast, the Australian Dollar lagged among commodity currencies, with AUD/USD approaching 0.6400. However, the pair trimmed its losses and settled around 0.6420.
Metals tumbled, with Gold breaking below the $1,920 level and approaching the $1,915 support area. Silver also experienced a decline of 1.85%, falling from $23.55 to the $23.00 mark.
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