USD/JPY extends lower as U.S. Treasury yields fall

USD/JPY extended lower in Asia on Wednesday to touch a low of 123.60, moving further off from Tuesday’s six-week high of 124.46. There was no obvious catalyst for the dollar pullback but USD losses coincided with a retreat in equity markets and lower U.S. front-end yields. U.S. stocks fell on Tuesday as results from IBM and United Technologies dampened optimism for the earnings season. The blow to stocks made bonds look more attractive in comparison and nudged Treasury yields lower, in turn weighing on the greenback.

EUR/USD rebounded to 1.0937, pulling away from a three-month trough of 1.0808 set on Monday.

GBP/USD was steady between 1.5544 and 1.5577. Focus will be on the Bank of England todays as it will publish the minutes of its July policy meeting. Repeating comments made earlier in the month, BOE Governor Mark Carney said on Tuesday the central bank will need to decide around the turn of the year whether the time is right to start raising rates.
With the U.S. dollar on the backfoot for now, commodity currencies were given a hand up. The Australian, Canadian and New Zealand currencies all bounced off six-year troughs set in recent sessions.

AUD/USD bounced back above 74 U.S. cents, climbing from a low of 0.7328. It briefly spiked to 0.7437 on Australian inflation data and then dipped to 0.7371 after a speech by the head of the Reserve Bank of Australia, Glenn Stevens.

NZD/USD rose above 66 U.S. cents from 0.6498. It later fell but found support at 0.6600.

USD/CAD rose to 1.2967, edging off Monday’s trough of 1.3025.

The post USD/JPY extends lower as U.S. Treasury yields fall appeared first on Forex Circles.

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