USD/CHF: Dollar jumped on higher US Treasury yields ahead of auctions

USD surged on higher US bond yields ahead of this week’s $437 billion US Treasury auctions.
USD was also helped by Japanese jawboning.

The USD/CHF is now trading around 0.9540, jumped by almost 0.75% in New York session on a broader recovery in dollar amid higher US bond yields ahead of a deluge of US Treasury auctions later in the day. The benchmark 10-year US Treasury yield moved to 2.93% as the US government bond prices are under pressure on supply concerns as the US Treasury gets ready to auction $151 billion of short-term Treasury bills and $28 billion of 2-year Treasury notes on Tuesday ahead of this week’s “monster issuance” of another $258 billion worth of the US Treasury securities.

It seems that the yield-hungry market is viewing yields on 2-year Treasuries as a buying opportunity in an environment of negative short-term yields on Japanese and German notes.

After last week’s light Japanese jawboning, US Dollar was further boosted on Tuesday when Japanese Finance Minister Taro Aso reiterated that BOJ has to continue working with the government to achieve the 2% inflation target, although the country may have more or less escaped from an economic depression.

The Swiss franc is under pressure on risk-on rally similarly to the gold and Japanese Yen which are regarded as safe haven assets. Any fresh geopolitical worries such as Muller’s ongoing investigation about Russia and Trump could also boost the CHF in the days ahead on risk-aversion narrative.

Technically, USD/CHF now has to sustain above 0.9435 area for a further rally, else sustaining below 0.9415-0.9395, it may again come down.

GBP/USD struggles for direction around 1.3550

GBP/USD finds it difficult to extend recent gains, meeting decent resistance around the 1.3550 area on Tuesday. Cable’s irresolute price action follows the equally directionless performance of the Greenback, while the disheartening UK jobs data also seem to linit the upside.

EUR/USD remains slightly bid, still below 1.1600

EUR/USD keeps the current bullish tone well in place and approaches the 1.1600 region on turnaround Tuesday. Indeed, the pair advances for the fourth day in a row amid the lack of direction in the US Dollar, steady uncertainty in the geopolitical landscape and diminishing bets for further Fed rate hikes.

Gold eases to two-day lows near $4,350

Gold accelerates its daily correction and revisits the $4,350 zone per troy ounce on Tuesday. The yellow metal leaves behind two daily advances in a row and follows the absence of direction in the US Dollar, declining US Treasury yields across the curve and continuous uncertainty in the Middle East crisis.

Crypto Today: Bitcoin, Ethereum, XRP falter amid escalating US-Iran tensions

Cryptocurrency prices are broadly correcting on Tuesday, with Bitcoin edging lower toward $64,000. Ethereum shows weakness amid ongoing narrow-range consolidation, while Ripple trades below $1.00, weighed down by falling technical indicators.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.