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Forexlive Americas FX news wrap: USD/JPY rallies for a second day, AUD struggles after RBA

Markets:

  • Gold up $33 to $2692
  • WTI crude oil flat at $68.38
  • US 10-year yields up 3 bps to 4.23%
  • S&P 500 down 18 points to 6034
  • GBP leads, NZD lags

The US dollar strengthened to the best levels of the day early in North American trade on Tuesday but softened in the back half of the day. Neither move had a particularly strong fundamental backing and the turnaround came after Europe went offline. It also coincided with a deterioration in equities, which runs counter to the usual EUR/USD and GBP/USD correlations.

The Australian dollar neared the lowest levels of the year after the RBA highlighted a shift to a more-dovish stance in its statement earlier. That was compounded by worries about Chinese growth and stimulus this week that could fall short of the optimistic talk from Chinese officials.

USD/JPY rallied for the second day as Treasury yields ticked higher. A 3-year note sale had a yield that was slightly below what the market was pricing and that halted the rise in yields and USD/JPY.

Gold was a standout performer once again as it gets a tailwind from China returning to bouillon purchases in data published on the weekend.

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

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