Currency Market Analysis

Apr 23, 2018 | Currency Market Analysis

Global Themes

USD jumps as bond yields rocket

A strong push higher in US bond yields on Friday saw the US dollar jump.

A series of upbeat assessments on the US economy from US Federal Reserve members drove growing expectations that the US Fed would continue to raise rates in 2018.

US two-year bond yields hit eight-year highs while ten-year yields hit four-year highs. Higher market interest rates typically boost a currency and the USD was higher.

Euro, pound weaker

TIn other markets, the British pound weakened after the Bank of England governor Mark Carney indicated that there still uncertainty ahead of next month’s rate decision.

The euro was also weaker as markets look ahead to next week’s European Central Bank decision.

Aussie, euro in focus

This week’s major data comes from Australia and Europe.

In Australia, tomorrow’s first-quarter inflation numbers can have a big impact on the AUD. The market is looking for 0.5% over the quarter and 2.0% in annual terms. A weaker number can see the AUD fall.

From Europe, Thursday’s European Central Bank meeting will be critical.

A recent run of poor European data might cause the ECB to delay the end of its stimulus program. If so, the EUR might weaken.

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