Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Dollar holds firm as yields rise
The US dollar maintained its strength overnight (98.87 at the time of writing), buoyed by a string of robust economic data and a technical push higher in yields. US 10-year Treasury yields climbed 3.5bps to 4.18%, as jobless claims came in below expectations and Challenger job cuts dropped sharply.
The greenback’s resilience was further underpinned by a rebound in crude oil prices (WTI +4.3%), reflecting renewed geopolitical jitters.
US equities were mixed, with the S&P 500 flat and the Nasdaq down 0.5%, as tech stocks lagged and defense names rallied on calls for a larger military budget.
Asian equity futures point to a cautious open, with traders eyeing China’s CPI/PPI data for fresh signals on the recovery.
Oil prices surged on supply concerns, while China’s rare earth export controls and US efforts to boost domestic output kept the sector in focus. Chinese refiners are reportedly turning to Canadian crude as an alternative to Venezuelan supply.
US jobless claims rise but stay below forecast
US initial jobless claims rose to 208k in the week Jan. 3, up from 200k previously. However, that was below the 212k that was expected. Continuing claims rose to 1914k from 1858k in the prior week, while the Bloomberg consensus was expecting a jump to 1900k.
In Asia, the US dollar has strengthened against the Singapore dollar in recent days.
The next key resistance for USDSGD lies at 50-day EMA of 1.2906, followed by 100-day EMA of 1.2924.
BoJ sees steady recovery as firms plan wage hikes
The Bank of Japan kept its economic outlook unchanged across all nine regions in its latest quarterly report, noting moderate recovery despite some areas of weakness. Branch managers also reported that many businesses expect to raise wages in the coming fiscal year, at a pace similar to the current one.
The dollar remains strong against the yen, holding above 155. The next key support lies at 21-day EMA of 156.38, followed by 50-day EMA of 155.31.
Antipodeans down on dollar strength
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 5 – 10 January
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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.
