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USD Finds Some Support, Higher Yields Helping

FOREX

The USD is finding some support in the first part of today's session. Slightly higher UST yields (2yr to 4.265%, +3.5bps for the session) is helping, while the tone in equity markets is modestly risk-off (US equity futures are -0.30-0.40% at this stage). The BBDXY up 0.12%, last close to 1258.75.

  • USD/JPY has rebounded modestly, last around 135.55, versus earlier lows near 135.00. There is some focus on BoJ's Tamura comments for the potential around policy review but it hasn't lent any further support to the yen.
  • The A$ continues to underperform, down 0.25% from NY closing levels and back sub 0.6800. The October housing finance figures came close to expectations (-2.7% against a -2.0% forecast), but revisions were positive.
  • NZD/USD is also lower, back under 0.6360. The AUD/NZD cross is relatively steady around 1.0690.
  • Higher USD/CNH levels, the pair back to 7.0500, has likely weighed on the A$ and NZD at the margin.
  • Other currencies are mostly off by 0.10-0.15% against the USD.

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