The American dollar finds no love despite oversold technical conditions and slipped to a three-year low below 90.00 levels in Asia. USD/JPY reportedly ran through stops on USD longs placed below 110.00, thus leading to a broad-based sell-off in the greenback. Also, USD bears are salivating at the idea of Sino-US trade row escalating to a full-fledged trade war. The list of dollar-negative developments doesn't end there... even the treasury yields are looking heavy now. For instance, the 10-year yield is trading dead flat at 2.62 percent, having declined from the 42-month high of 2.66 percent in the last two days.
What's brewing in the majors?
EUR/USD - The common currency remained bid above 1.23 in Asia, courtesy of yesterday's solid Eurozone consumer confidence number. The drop in USD/JPY below 100.00 levels gave an additional boost to the common currency, pushing it to a fresh three-year high of 1.2335. Further rally towards 1.2376 (127.2% Fib extension of the Nov low - Nov high - Dec low) could be seen if the Eurozone and German preliminary PMI numbers beat estimates and show an uptick in input and output costs. That said, the bulls still need to observe caution as ECB's Draghi (tomorrow) will likely reiterate central bank's resolve to keep monetary policy accommodative.
GBP/USD - hit a fresh post-Brexit vote high of 1.4049. Progress on Brexit front, upbeat UK CBI total trends survey and an improvement in public finances in December seems to have put a bid under the British Pound. Having rallied more than 500 pips since Jan. 11, Cable looks overbought as per the daily RSI. However, strong UK wage growth numbers (due today) could still push GBP/USD higher to 1.41 and beyond. On the other hand, the dismal wage growth figure could yield much awaited technical correction.
USD/JPY - The spot clocked a 19-week low of 109.80 and was last seen trading at weekly 100-MA level of 109.88. A slightly hawkish BOJ and fears of an all-out trade war between the US and China could keep the Yen well bid. Technicals continue to favor a near-term drop to 107.60.
Major news
Japan Flash Manufacturing PMI - Output rises at the quickest rate in 47 months.
Japan exports rose 9.3 percent year-on-year in December.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold: Record-setting rally remains intact ahead of US PCE data
Gold price refreshes a fresh all-time peak, closing on the $3,100 mark. The global risk sentiment continues to be undermined by worries over Donald Trump's auto tariffs announced earlier in the week, with traders rushing for safety in Gold price. US PCE inflation data awaited.
EUR/USD trades with mild losses below 1.0800, awaits US PCE
EUR/USD is on the back foot below 1.0800 early Friday, struggling to capitalize on the previous day's goodish bounce. Trump's tariff jitters keep investors on the edge, leaving the pair gyrating in a range ahead of the key US PCE inflation data.
GBP/USD holds steady near 1.2950 after UK data
GBP/USD stays quiet and fluctuates near 1.2950 in the European session on Friday. Uncertainty over US President Trump's tariff plans weigh on risk mood and caps the pair's upside, even after February Retail Sales data from the UK came in better than expected.
US core PCE inflation expected to remain sticky, reinforcing Federal Reserve’s cautious stance on rate cuts
The United States Bureau of Economic Analysis is set to release the PCE Price Index data for February on Friday at 12:30 GMT. The core Personal Consumption Expenditures Price Index is expected to rise 0.3% MoM and 2.7% YoY in February.
US: Trump's 'Liberation day' – What to expect?
Trump has so far enacted tariff changes that have lifted the trade-weighted average tariff rate on all US imports by around 5.5-6.0%-points. While re-rerouting of trade will decrease the effectiveness of tariffs over time, the current level is already close to the highest since the second world war.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.