US dollar supported by rising yields
The US dollar strengthened overnight as the global bond sell-off continued, supporting demand for the greenback and weighing on most major currencies.
The benchmark US 10-year Treasury yield climbed to its highest level since 2007, rising from 4.95% to 5.19% so far this week. Meanwhile, the 30-year Treasury yield reached its highest level since 2004 as investors continued to price in higher interest rates for longer.
The US dollar’s strongest gains were against fellow safe-haven currencies, with USD/JPY and USD/CHF both rising 0.3%.
US equities were mixed as higher bond yields continued to pressure risk sentiment.
Aussie falls as unemployment rises
The Aussie was among the weakest-performing major currencies after Australia’s August labour market report showed a stronger-than-expected employment gain of 39,000 alongside a rise in the unemployment rate.
AUD/USD fell 0.4% and touched its lowest level since 4 August as markets focused on the softer labour market signal.
Key support for AUD/USD is now located at 0.7000. A sustained break below this level would expose longer-term support around 0.6870.
NZD/USD also weakened, falling 0.2%.
BoE speech and US data in focus
Attention now turns to a speech from Bank of England Governor Andrew Bailey, due at 7.15pm AEST, for fresh clues on the UK’s interest rate outlook.
In the US, durable goods orders and the University of Michigan consumer sentiment survey are due later today. The data will provide another test of whether strong economic activity continues to support expectations that US interest rates may remain higher for longer.
Aussie heads back towards 0.7000
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 21 to 26 September
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
