The dollar was little changed in late-U.S.
trade on Friday, tracking a rise in Treasury yields that helped it recover from early losses brought on by lower-than-expected U.S. core PCE inflation.
Though the PCE data sounded in harmony with Chair Jerome Powell’s congressional testimony, which softened last week's hawkish Fed rate projections, thus weighing on the dollar initially, the turn higher in yields proved to be firm support for the U.S. currency.
Ten-year Treasury yields rose 4bps on the session, buoyed by optimism over the U.S. infrastructure plan announced on Thursday, which could help bring forward U.S. growth and pave the way for the Fed to make a lasting exit from the extraordinary monetary accommodation of the pandemic.
But the dollar's see-saw session highlighted the market's indecision and lack of a clear catalyst to forge new ranges until data normalizes from the pandemic shock and jolting recovery.
EUR/USD erased early gains in New York's afternoon as yield across the curve moved higher.
USD/JPY found support by its 10-day moving average at 110.50, rising into the U.S. close to 110.85, just below June 23-24’s 2021 high at 111.11
GBP/USD rallied slightly after the tepid PCE data, rising to 1.3934, just ahead of 100-DMA and daily cloud base resistance.
Thursday’s dovish BoE hold limited sterling strength.
The dollar-boosting rise in yields did no favors for bitcoin and ether, which were both down more than 6%.
Oil got a boost on global recovery optimism.
Next Friday's non-farm payrolls will be the U.S. economic event of the week, with ADP, ISM manufacturing, Markit PMI and weekly jobless claims also among the highlights.
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