I thought it was hot until the evening, apparently, it was raining in the afternoon. This is what happened to the trading of the US dollar which rebounded at the beginning of the European session.
What suddenly makes this currency king ‘reverse’ again?
Ye. You're right. This is all due to a higher jump in 10-year U.S. treasury yields to its latest high since January, at 1.742%.
As is known, since the beginning of this year the US dollar has gained support from a drastic increase in US bond yields from around 0.9% up to today’s latest high.
In the previous session, the greenback dollar had depreciated sharply following the dovish remarks of Federal Reserve (Fed) Chairman Jerome Powell following the outcome of the FOMC policy meeting early Thursday morning.
The depreciation of the US dollar has provided an opportunity for most major currencies to rise higher, however, the rise was almost extinguished due to the rebound of the king of this currency.
The euro almost wiped out some of its gains by trading around 1.194000 against the US dollar.
Meanwhile, the pound's depreciation was seen as insignificant, with the main focus of the market being targeted at the Bank of England (BOE) policy meeting at 8pm Malaysian time tonight.
Governor Andrew Bailey had previously said that the central bank was ready to increase government bond purchases and gave a cautious signal of the UK’s economic recovery. This may be a clue to the new action the BOE will take tonight.
