- 10-year US Treasury bond yield pierces below 2% on Thursday.
- US Dollar Index erases large part of daily gains following US data.
- ISM Manufacturing PMI falls short of market expectation in July.
Following a rally to a fresh two-month high above the 109 mark earlier today, the USD/JPY pair made a sharp U-turn and slumped to its lowest level in a week as the sharp fall witnessed in the US Treasury bond yields allowed the JPY to gather strength against its peers. As of writing, the pair was down 0.4% on the day at 108.30.
Although Fed Chairman Powell's remarks on the policy outlook yesterday caused investors to doubt another 25 basis points rate cut in September and allowed the US Dollar Index (DXY) to jump to its highest level in more than two years at 98.93, today's data from the US weighed on the Greenback.
Dismal PMI data hurts dollar
The ISM Manufacturing PMI in July fell to 51.2 from 51.7 and missed the market expectation of 52 today. The DXY erased a large part of its daily gains after the data and was last seen at 98.65, still adding 0.08% on the day. The data also seems to be weighing on the Treasury bond yields. At the moment, the 10-year references is losing more than 2% on a daily basis, keeping the bearish pressure on the pair intact.
Commenting on the data, "The drop was almost in full explained by a drop in both the production index and the employment index," said Nordea Markets' analyst Kjetil Olsen. "The more forward-looking new orders index was actually slightly up, and the new orders minus inventories series give hopes for a stabilisation in the near term."
During the early trading hours of the Asian session on Friday, the Bank of Japan will release the minutes of its last monetary policy meeting. Later in the day, the labour market data from the US will be the last significant data release of the week. Investors expect the Nonfarm Payrolls (NFP) to come in at 164,000 in July following June's strong 224,000 reading.
Technical levels to watch for
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
EUR/USD holds gains near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.