Currency Market Analysis

Nov 12, 2020 | Currency Market Analysis

Global Themes

US dollar stages comeback as bond yields jump

The US dollar extended recent gains versus major currencies overnight with a lift in US bond yields providing support to the world’s most traded currency.

US bond yields have been slowly recovering over the last few months as the likelihood of a Biden win in last week’s US presidential campaign become more likely.

The move higher accelerated this week with the US ten-year bond yield climbing from 0.82% to 0.97% in this week’s trading.

The bond-market move has also likely been helped by the positive news from Pfizer and BioNTech on their vaccine trails.

Major FX lower

The US dollar strength saw other major markets weaken.

The euro was weaker with the EURSGD falling to four-month lows.

The Japanese yen also dropped to trade near five-month lows.

Policy talk

Today’s trading sees a series of data releases with Australian inflation expectations released earlier, UK GDP due at 3.00pm and US inflation as 9.30pm tonight.

Later, the main focus tonight is on the European Central banks panel discussion on monetary policy with Jerome Powell from the US Federal Reserve, Andrew Bailey from the Bank of England and the ECB’s Christine Lagarde all speaking.

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