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The US 10-year real yield’s green 5-day EMA has pulled away from its orange 10-year EMA (black circle). This is suggestive of strength in the real yield, which is currently trading at 2%. This is elevated and is providing a layer of support for FXCM’s USDOLLAR basket.
The pair found support after Thursday’s plunge due to the dovish hike by the European Central Bank, but remains at a perilous state ahead of the Fed’s pivotal decision
Following a cumulative 450 basis point rate hike, the ECB has now elevated its deposit rate to an all-time high.
The pair finds support from today’s release, which showed that the UK economy contracted in July, but markets now turn to Thursday’s ECB decision amidst heightened uncertainty
The pair slid on Monday after the Bank of Japan governor opened the door to an eventual hike, but finds support today ahead of key economic data
Total pay in the UK rose further as today’s data showed, which keeps pressure on the BoE for further tightening ahead of next week’s decision, but the pair fails to benefit
Over the weekend, in an interview with the Yomiuri newspaper, Bank of Japan Governor Ueda expressed that the BoJ might possess sufficient data by the end of the year to decide regarding the possibility of ending negative interest rates.
The Governor said yesterday that the central bank is now closer to peak rates, weighing on the pair, amidst broader USD demand
The Bank of Canada held rates at 5.0% on Wednesday, but the pair was little changed, maintaining its positive tilt ahead of the 2023 high
The spread between the US 10-year bond and 10-year Japanese Government bonds (JGBs) is a key driver of the USDJPY.
The pair slumped to 2023 lows after the Reserve Bank of Australia maintained rates at 4.1% yesterday, but catches a breath today as AU Q2 GDP came in better than expected
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