Dollar is being the standout performer this week, bolstered significantly by surging US treasury yields. Dollar index, which gauges the greenback against a basket of six major currencies, reached a high not seen since the previous November, breaking 106 mark. Contributing to the bullish momentum, EUR/USD has plunged through a pivotal support level at 1.06, and USD/JPY is inching closer to 149 mark. Interestingly, 10-year yield has surged to an impressive 4.5%, marking the highest point since 2007. Initially, a wave of risk aversion propelled Dollar during US trading hours. However, after major stock indexes rallied to end in positive territory, the greenback's ascent moderated. Still, as major Asian markets trended downwards, Dollar managed to hold its ground. At present, Swiss Franc is lagging, being the week's poorest performer, with the Euro not faring much better. British Sterling is aiming to pare back its losses from the previous week, while Yen is in a flux, with traders cautious due to potential interventions by Japanese authorities. Remarkably, despite Dollar's strength, commodity-linked currencies have managed to showcase some resilience. Technically an immediate focus now is on whether 10-year yield could power through the medium term channel resistance to accelerate up, and the subsequent impact on other markets. If materialized, TNX could march further to next target at 61.8% projection of 1.343 to 4.333 from 3.253 at 5.100, which is above 5% mark. On the other hand, while a retreat from the current level cannot be ruled out, near term outlook in TNX will stay bullish as long as 4.362 resistance turned support holds. The market will likely get more clarity on these movements in the upcoming days. In Asia, at the time of writing, Nikkei is down -0.92%. Hong Kong HSI is down -0.84%. China Shanghai SSE is down -0.33%. Singapore Strait Times is down -0.08%. Japan 10-year JGB yield is up 0.013 a 0.744. Overnight, DOW rose 0.13%. S&P 500 rose 0.40%. NASDAQ rose 0.45%. 10-yea ryield rose 0.104 to 4.542. |
