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Broader USD Strength As Yields Lift Post Auction

FOREX
  • A continued push higher in Tsy yields after the poorly received 7Y auction has seen an extension of intraday USD strength, although with BBDXY and DXY only back to the lower/mid end of yesterday’s range.
  • USDJPY is now down just -0.2% on the day having lifted 130pips from fresh recent lows of 140.25. The bounce has come from a combination of those higher US yields, technical levels at play having stopped short of 140.23 (Fibo projection of Nov 13-21-22 price swing) after previously clearing support at 140.71 and then lifting with the WMR fix along with month and year-end flows.
  • Broader USD strength helps offset a continued decline in crude futures for CAD, with CAD outperforming most high beta peers bar NZD. USDCAD at 1.3225 has lifted off session lows of 1.3183 but remains within the session range and with the pair still in oversold territory on a 14-day RSI basis.

USDJPYSource: Bloomberg

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