USD/JPY holds above 108 following mixed batch of US data
- Markit Manufacturing PMI drops to lowest level since September 2009.
- 10-year US Treasury bond yield loses more than 1% on Wednesday.
- US Dollar Index posts small losses, sits comfortably above mid-97s.
The USD/JPY pair is struggling to set its next short-term direction in the second half of the day and continues to move sideways in a very tight range near the 180 mark. As of writing, the pair was down 0.12% on the day at 108.09.
Following yesterday's rally to a fresh weekly-high, the 10-year US Treasury bond yield reversed its direction on Wednesday to weigh on the positively-correlated pair. At the moment, the yield is losing more than 1%, erasing all of Tuesday's gains.
On the other hand, the greenback stays resilient against its rivals despite today's mixed macroeconomic data releases from the United States and doesn't allow the pair to continue to push lower.
US service sector gathers momentum in July
The IHS Markit's Flash PMI report today showed that the business activity in the US manufacturing sector stayed unchanged with the Manufacturing PMI dropping to 50 in July but the service sector expanded at a more robust pace than expected as Services PMI climbed to 52.2 from 51.5 in June. Other data from the US revealed that New Home Sales rebounded in June by rising 7% following May's 8.2% contraction. Following the data, the US Dollar Index continues to move up and down near the 97.70 mark, where it closed the previous day.
Meanwhile, despite some positive developments surrounding the US-China trade conflict, disappointing earnings figures from Boeing and Caterpillar forced the market sentiment to remain neutral in the second half of the day.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
