The dollar recovers some ground as we near European midday
Chop, chop. The dollar continues to look unsettled over the past two days as losses from earlier today is seen abating with Treasury yields inching slightly higher on the session. EUR/USD has now turned flat at 1.1255 after having touched highs of 1.1275 earlier.
The dollar’s advance also sees it pare some losses against the likes of the yen, pound, aussie and kiwi as well. That said, the greenback is still holding a little softer overall.
In between though, there is swing region resistance around 1.1277-85 which is also proving to be a tough spot for buyers to break through for now.
US 10-year yields are now sitting just above 2.14% after having bounced around between 2.12% to 2.13% during the session and that’s leading to some added choppiness in dollar trading today.
As mentioned earlier, markets will have to figure out whether the Fed is intending the July rate cut to be an “insurance cut” or the start of an easing cycle and as such, it will make for some choppy trading until we get more clarity.
I reckon we won’t know much until we hear from the Fed at the end of the month but in the mean time, I would argue that the most reliable indicator of dollar weakness/strength would be through yields/bonds.