Dollar resumes uptrend as 10y yields..........>

FOREX: Dollar resumes uptrend as 10y yields resolutely hold the 3% mark

-The dollar index touched the highest levels since early January and is fast

approaching the 200-dma as FX markets continue to follow the lead of bond

yields. With the 10y yield (and wider Treasury yield curve) touching multi-year

highs for another consecutive session, the stronger dollar pressed most major

pairs to multi-month lows.

-Particular pain was seen again in NZD/USD, which is suffering its seventh

consecutive daily decline and has fallen over 4.5% from the recent peak. Options

markets remain relatively bearish on the currency, with 1w risk reversals

touching multi-week lows today.

-EUR/USD remains on the backfoot and the option expiry calendar is gaining

attention: over E5.2bln of options are due to expire at the 1.22 handle

tomorrow, which is bound to influence post-ECB trade.

-Barring the move in the USD and NZD today, all other majors looked relatively

non-committal ahead of tomorrow's ECB rate decision and Friday's US advance GDP

numbers.