Euro, Sterling climb, USD/JPY slides, Aussie rebounds
Summary
The US 10-year bond yield tumbled 15 basis points to 4.65% after Atlanta Fed President Ralph Bostic said that the US central bank does not need to increase interest rates any further.
Two-year US treasury yields plummeted to 4.96% (5.08%). Other global bond yields finished lower but to a lesser extent than those of the US. Germany’s 10-year JGB rate was at 2.77% (2.88%).
A popular gauge of the Greenback’s value against a basket of 6 major currencies, the Dollar Index (DXY) eased 0.28% to 105.75 (106.10). The Euro (EUR/USD) rebounded to finish at 1.0600 (1.0585).
The ongoing Middle East conflict was initially supportive for the US currency. However dovish speak from Bostic and the marked drop in US treasury yields weighed on the Greenback.
Sterling (GBP/USD) climbed against the weaker Dollar to 1.2277 from yesterday’s 1.2237. Bank Of England policymaker Katherine Mann said that central bankers need to be more aggressive.
Against the Japanese Yen, the US Dollar settled at 148.71, modestly lower for yesterday’s 149.25. The Australian Dollar (AUD/USD) edged rebounded to close at 0.6425 (0.6387 yesterday).
The Greenback fell against the Asian and Emerging Market Currencies. USD/CNH (Dollar-Offshore Chinese Yuan) slid to 7.2865 from 7.3080, it’s lowest finish in a week. Against the Thai Baht, the Dollar (USD/THB) plummeted to 35.60 from 36.90. USD/SGD (Dollar-Singapore) was flat at 1.3630.
Wall Street stocks finished stronger as risk appetite improved and the Dollar eased. The DOW gained 0.42% to 33,745 (33,430) while the S&P 500 finished at 4,360 from 4,312 yesterday. Other global stock markets rallied. Australia’s ASX 200 jumped to 7,080 (7,018).
Economic data released yesterday saw UK BRC Retail Sales slump to 2.8% from 4.3%, missing expectations at 3.1%. Australia’s Westpac Bank Consumer Sentiment soared to 2.9% from -1.5%.
Japan’s Economy Watcher’s Sentiment slumped to 49.9 from 53.6 previously, missing estimates at 53.2. Italy’s Industrial Production rose to 0.2% from a downward revised -0.9% (-0.7%).
US September Consumer Inflation Expectations rose to 3.7% from 3.6% while the US NFIB September Business Optimism Index dipped to 90.8 from 91.3 previously, and lower than estimates at 91.1.
EUR/USD – The Euro rallied above the 1.0600 resistance level against the Greenback to an overnight high at 1.0615 before easing to finish at 1.0600 in New York. In choppy, albeit thin trade, the shared currency hit an overnight low at 1.0554 before rebounding.
USD/JPY – Against the Japanese Yen, the US Dollar plummeted to an overnight low at 148.16 in choppy trade. The USD/JPY pair traded to an overnight high at 149.10 before sliding to its New York close at 148.70. Yesterday, the USD/JPY pair was at 149.25.
AUD/USD – The Aussie Battler climbed above 0.6400 to close at 0.6425, up from yesterday’s 0.6385. Talk of Chinese stimulus measures, as well as broad-based US Dollar weakness, buoyed the Australian Dollar. Overnight low traded was 0.6390.
GBP/USD – Sterling rallied against the broadly based weaker US Dollar to finish at 1.2277, up from yesterday’s 1.2237. The overnight high traded for the British Pound was 1.2291 while the overnight low recorded was 1.2212. Hawkish talk from a BOE official boosted Sterling.
