Dollar Rebounds From Near Year's Lowest Level Before Fed MinutesBy and
GBP retreats from high; risk aversion abates after bombing
Euro loses momentum despite upbeat data as rally may be fading
The dollar climbed to a new session high as Treasury yields rose and traders waited for fresh drivers ahead of the release of the FOMC meeting minutes Wednesday.
The greenback advanced versus seven of its G-10 peers, with losses against only the antipodean currencies and the Canadian dollar. A flurry of stop-loss dollar buy orders were tripped against the yen and euro later in the U.S. session, bolstering modest dollar gains. Traders will look at the Wednesday minutes from the May meeting of the Federal Open Market Committee for fresh clues on the timing of future rate hikes.
- With market attention on the bombing overnight in Manchester, neither the euro nor the dollar saw lasting impact from data that underscored the divergence of the euro-area economy from the U.S. The euro area saw above-estimate reports on May manufacturing and composite PMIs, while those in the U.S. missed estimates. The U.S. saw steeper-than-expected declines in April new home sales and the May Richmond Fed manufacturing index
- EUR/USD is trading ~1.1190 vs a session low of 1.1182 reached before bids at 1.1180 cushioned
- ECB’s Benoit Coeure said he sees no need to change the central bank’s guidance on policy sequencing; there won’t be rate increases before the end of asset purchases
- Meanwhile, German Finance Minister Wolfgang Schaeuble said the euro’s exchange rate is a little bit too low for Germany, but not for other euro-area countries
- USD/JPY pared gains made after UST yields spiked, to trade ~111.54; session high of 111.79 reached as 10Y UST yield climbed above 2.2650%. USD tripped stop-loss buy orders above the overnight peak at 111.35 and again above 111.50 after interim offers were filled, trader in New York said
- GBP/USD is trading ~1.2980 after spiking to fresh high at 1.3034 as stop-loss buy orders were tripped. GBP fell to 1.2953 after U.K. officials confirmed that the Manchester attack is considered an act of terror. GBP is mixed vs G-10 peers with steepest losses against NZD and AUD