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Surging U.S. yields are fuelling a knee-jerk rise by the dollar, but EUR/USD traders should not expect a rapid drop.
Although the breaks for bonds are significant and probably enduring, the are more likely to signal a gradual, long-term decline.
The current range -- basically a play on 1.10-1.20 -- may be 1.05-1.15 by this time next year with yields on the long bond closer to 4 percent.
Bonds have momentarily broken from their usual glacial pace but are still likely to prove a drip feed in terms of influence on most FX, especially very liquid pairs like EUR/USD.
That said, there's no doubting how important these bond moves are.
Yesterday's rise for the 30-year yield was the biggest one-day gain since November 2016.
It exceeded 3.37 percent, a 38.2 percent retracement of the drop in the yield since the peak in 2007, before the global financial crisis.
Fifty percent of that same move is 3.76 percent.
That's a plausible target, but it won't come so quickly.
EUR/USD and 30 year US yield Click here