The euro extended its one – month lows and expected the ECB without enthusiasm.
The yield on 10 – year US is to blame for the escalation of the dollar against all rivals. With 3% in the crosshairs, fixed income approaches its psychological threshold and reached a maximum of more than four years during the last morning, just at 2,998%, from which has fallen marginally. The correlation between bond yields and the dollar has once again put into play and has been noticeable in the landmark three – month dollar index, which measures its performance against a basket of six rival currencies, at 91.076 points.
Not only that, the widening premium between the European and Japanese bond US and 10 years, the euro has extended the seven-week and a half on Monday, to $ 1.2185 and the yen has depreciated to the 108.82 yen, its worst change in two and a half months. The ‘greenback’ Monday experienced a boom of a 1% against its Japanese counterpart, the highest increase in 24 hours last month. “It was precisely the break level of 108.00 yen took triggering stop-loss orders, accelerating sales in the yen,” according to Tarek Horchani, Saxo Bank.
In addition, the radical reduction of geopolitical risks and trade tensions that have kept the dollar under great pressure in recent weeks has thrown gasoline to long in US currency, waiting for any opportunity to take control. “While it is early for investors packaged its bearish view in the short term, on which there remains a broad consensus, we see how the weaker short positions are being eliminated from the market,” said Stephen Innes, an analyst at Oanda .