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Apr 29 - 04:55 PM

EUR/USD - COMMENT-US Recap: EUR/USD Surrenders 2-Month Peak As Yields Lift Dollar

By Paul Spirgel  —  Apr 29 - 03:01 PM

The dollar index gained on Thursday, erasing earlier losses as rising U.S. yields helped it shrug off Fed-inspired weakness in the previous session, though its road to recovery remains daunting.

The dollar remained near its earlier lows even after a 0.17% rise on the day by late U.S. trade, with slightly above-forecast U.S. GDP providing only a modest boost and markets inclined to shrug off strong data surprises in light of the Fed's repeated promises to keep policy accommodative and look through transitory inflation.

After striking a 2-month high of 1.2150 in the post-Fed dollar selloff, EUR/USD retreated, producing warning signs for longs, including a doji on the daily candle and RSI diverging on the high.

USD/JPY slipped from early session 2-week highs by 109.22, with offers overwhelming the rally on the approach to 109.23, the 50% Fib of 110.97-107.48 April range. USD/JPY generally remained tethered to U.S. 10-year Treasuries, and its fall from its highs coincided with a drop in the benchmark yield from 1.69% to 1.65% in the New York afternoon.

GBP/USD traded in a slight 26-pip range in New York, holding most of Wednesday’s post-Fed gain and eying resistance at 1.4009, the April 20 high.
Prime Minister Boris Johnson's political woes were shrugged off, with focus shifting to May 6’s BoE MPC meeting for hints about future UK monetary policy.

AUD/USD reversed off an early 1 ½-month high by 0.7818 on the U.S. 10-year Treasury yield rise and its losses outstripped other major pairs with falling copper aiding the decline.

The crypto space saw a continued shift from bitcoin into ethereum, with ether putting in new an all-time high at 2,802 and BTC slipping 3.4% to 52.56k.

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Source:
Refinitiv IFR Research/Market Commentary

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