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Dollar Gains on Downside Equity Breakout, Fresh Multimonth Highs

  • Greenback strength extends through the European open, with the range breakout following a soft open for equities (Eurostoxx 50 futures broke below the YTD low, helping trip weakness more broadly). This puts the USD Index at new multi-month highs to narrow in on the 50-dma resistance at 103.231.
  • Moves here triggered by a shift in risk sentiment, specifically the break lower for European stocks, rather than a specific headline or datapoint.
  • USD/CNH a standout chart, with USD/CNH breaking higher to print new multi-month highs on both greenback strength, as reports that China are considering fresh stimulus spending fail to prop the currency.
  • Volumes are healthy given the return of US investors after the partial market closure on Monday, aiding EUR futures volumes to now sit close to double the average level you'd expect to see at this point of the session.

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