FX Daily: Energy and long bonds remain points of attention
USD: Too soon to be chasing the dollar lower The DXY dollar index rebounded from the range lows at 99.40 yesterday, showing that the dollar is not quite ready to make a sustained break lower just yet. The two factors providing near-term support are higher energy prices and rising 30-year Treasury yields. Both of these, ...
Long bonds and energy prices remain areas of interest in the FX market. The US dollar index bounced off recent lows, indicating that a sustained decline may not be imminent. Support for the dollar comes from higher energy prices and rising 30-year Treasury yields. If these trends continue, it could lead to a September interest rate hike by the Federal Reserve.
Meanwhile, the euro is expected to remain within a narrow range, supported by cautious optimism around energy prices and upcoming Federal Reserve minutes. The British pound has shown a slight dip amid mixed UK jobs data, suggesting that the Bank of England may wait before initiating further hikes. Swiss francs are viewed as an increasingly attractive funding currency due to low volatility and cheaper borrowing costs compared to the yen.
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