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Greenback Weakening Extends, Antipodeans Outperform

FOREX
  • The bull steepening for the US treasury curve since the weaker-than-expected US JOLTS and confidence data continues to weigh on the greenback on Tuesday, with the USD index pressing fresh session lows in recent trade.
  • Lower core yields are bolstering the Japanese Yen, with USDJPY extending its powerful reversal from earlier cycle highs of 147.37 to 145.77 lows just printed. The currency is now down 0.50% on the session and the first support to watch lies at 144.77, the 20-day EMA.
  • EURUSD is moving in lockstep with the broader USD index, also rising a half a percent and approaching last Thursday’s highs around 1.0875 and initial firm resistance at 1.0900, the 20-day EMA.
  • Outperforming on the session are the antipodeans with both AUD (+0.67%) and NZD (+0.81%) benefitting from buoyant global equity benchmarks. JPMorgan noted that “this looks to be very much the benign sort of labor market cooling that Fed is targeting”, potentially underpinning the more optimistic price action for stocks on Tuesday.
  • The greenback and broader currency markets will remain focused on the key data releases due later this week - NFP, Core PCE and ISM.

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