The dollar gained modestly on Tuesday, consolidating more of last week's jobs-data-driven swings ahead of the ECB meeting and highly anticipated U.S. CPI on Thursday.
Much of this week's dollar trading has been is a consolidation of last week's gains on stellar ADP private payrolls, followed by losses on mediocre non-farm payrolls.
An early risk-off drop in Treasury yields steadied after the April JOLTS report revealed a record monthly rise in job openings to yet another record high nAQN049JOA.
The gap between the tight supply of labor and enormous demand for workers as the pandemic is exited was further highlighted by NFIB data nAQN049JOA.
But the inability to fill those positions is slowing the return to pre-pandemic employment levels the Fed says it needs to see before reducing emergency stimulus measures.
That reluctance to tighten and hopes rising inflation will moderate over time are keeping Treasury yields and the dollar heavy this quarter.
With 10-year Treasury yields at their lowest since the May 7 dive on April's poor NFPs results nL2N2NQ1FX, the reaction to Thursday's CPI is even more important for the dollar.
EUR/USD is down 0.1% and homing toward the 21-day moving average at 1.2179 after Monday's 1.2202 high got slightly above where prices were before Friday's jobs report sent it tumbling.
Euro zone data has been a mixed bag of late, with April data missing and May-June data showing more promise.
How much more promise is what the market will be looking for in Thursday's ECB projections, as no major policy changes are expected.
Sterling was down 0.16%, weighed down a bit more than the euro by concerns that new UK COVID cases could possibly stall full economic reopening and unresolved Brexit friction at the Irish border nL2N2NQ17I.
That the negative 10-year Gilt-Treasury yield spreads are 13bp lower than they were when sterling reached February's 1.4240 peak -- a peak barely breached by this month's 1.4250 high -- isn't a ringing endorsement for breakout.
USD/JPY gained 0.22%, but was stuck inside Monday's modest 109.19-635 range on EBS.
Prices remain above a grouping of support near 109 with little indication from the options market of a major move this week nL2N2NQ1LR.
BOJ deputy governor Amamiya reiterated the threat of further easing nL3N2NQ348, but limited movement in JGB yields means Treasury yields remain the primary driver for USD/JPY.
There was an early risk-off impulse across markets on reports of widespread website outages nL3N2NQ2KM, since resolved, and on further losses in cryptocurrencies amid increasing calls for tighter regulations and after U.S. officials managed to seize bitcoins paid to Colonial Pipeline hackers nL2N2NP20O.
Other than China's May inflation report Wednesday, there's little economic news until Thursday's U.S. CPI and the ECB meeting.
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