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Apr 12 - 04:55 PM

EUR/USD - COMMENT-US Recap: EUR/USD Treads Water As US Inflation Vigil Starts

By Paul Spirgel  —  Apr 12 - 02:56 PM

The dollar slipped on Monday, unable to gain traction even with a slight rise in U.S. yields as traders remained focused on CPI data due in the following session and retail sales later in the week.

U.S.
three- and 10-year Treasury auctions were unimpressive but also uneventful nL1N2M51UK, with the slight rise in benchmark yields during the U.S. afternoon insufficient to stir the dollar.

Investors were wary of being too aggressive ahead of upcoming data, particularly Tuesday's consumer price inflation, in the wake of last week's unexpectedly strong producer price report.

Fed Chair Jerome Powell's comments overnight kept a lid on risk.
He saw the U.S. economy at inflection point but had concerns about the risks of reopening the economy too quickly.

The recent return of IMM net USD G10 short positioning to pre-pandemic levels hints further USD gains may be harder to achieve without a further rise in 10-year U.S. Treasury yields to support such a move.

EUR/USD and AUD/USD were both confined to tight ranges during New York trading while emerging markets currencies and the yuan gained slightly.

Sterling rose mounting support near 1.3770 with England started reopening after three months of lockdown ending nL1N2M50BP and the UK and EU started working to alleviate trade frictions over Northern Ireland nL8N2M53UP.

USD/JPY traded in a slight 109.45-25 range in during the U.S. session, consolidating above Thursday's low of 109 on EBS, beside minor Fib support at 108.99.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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