US growth surprises to the upside
The greenback strengthened on Wednesday as stronger US growth and rising bond yields boosted demand for the US dollar.
The benchmark US 10-year Treasury yield surged from 4.96% to 5.11%, its highest level since 2007.
US equities fell, with the Dow Jones down 0.7%, the S&P 500 losing 0.8%, and the tech-focused Nasdaq dropping 1.1%.
The US dollar rose to its highest level since late July after the S&P Global flash US composite PMI jumped to 58.4 in September, its strongest reading in more than five years.
The stronger-than-expected data reinforced expectations that the Federal Reserve may need to deliver further rate hikes, lifting US yields and supporting the greenback against all major currencies.
Euro and sterling remain under pressure
In Europe, the euro and British pound both weakened.
EUR/USD fell 0.6% and dropped below 1.1400 to its lowest level since late July as rising US yields continued to support the US dollar.
GBP/USD lost 0.8%, its largest one-day decline since June, extending its recent run of losses as investors continued to favour the greenback. GBP/USD also fell to a two-month low, with major support now seen around 1.3200.
JPY weakens as yields rise
Across APAC, AUD/USD was the worst-performing major currency on Wednesday, falling 1.1%.
The Aussie was broadly steady in early Thursday trade as a stronger-than-expected August employment gain of 39,000 was offset by a rise in the unemployment rate.
In Asia, USD/JPY climbed to a three-week high as Japanese bond yields were caught up in the global bond sell-off.
Euro, GBP drop to two-month lows
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.
