USD Bid on Hawkish Evans, US 10yr Yield Returns to 3% - US Market Open
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MARKET DEVELOPMENT – USD ADVANCES ON HAWKISH EVENS, 10 YR YIELD RETURNS TO 3%
USD: The USD had broadly been on the back foot for much of the European morning. However, the DXY reversed course after a relatively hawkish speech by Fed’s Evans, who is typically a more dovish member. The rate setter stated that Fed Fund rate projections for 2019 and 2020 are mildly restrictive, given that the unemployment rate forecast is below the natural rate. Consequently, the USD tracked US yields higher with the 10yr eying 3% yet again.
AUD: The rise in the Australian Dollar stalled around the 0.7200 handle with 1.6bln worth of option expiries capping price action, coupled with the reprieve seen in the USD index. Trade wars continues to plague the Aussie and with the currency below 0.7300, the trend remains tilted to the downside.
JPY: Consolidation persists for USDJPY with the pair trading within a relatively tight range. Further upside in the pair has been curbed at the 112 figure, while offers reported 112.20, suggest that buying in the pair could be somewhat limited for now.
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--- Written by Justin McQueen, Market Analyst
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