US dollar bounces back as Treasury yields rise

The US dollar is higher today after two weeks of steady selling.

It’s been supported by a rise in Treasury yields of 8-9 bps across the curve and comments from the Fed’s Schmid, who didn’t sound in a rush to cut rates. Economic data today also underscored an economy that’s fine, with initial jobless claims and the S&P Global US services PMI both slightly better than expectations.

Yesterday the euro hit a one-year high against the US dollar but it was reeled back in today, falling 40 pips.

Tomorrow’s speech from Powell will surely be a market mover. What people are looking for is a sense of the cadence of cuts and the willingness to cut deeper if needed. We’re also looking for indications on where Powell thinks the terminal rate is.

This article was written by Adam Button at www.forexlive.com.