US dollar finds a footing as Treasury yields pop

Dollar off the lows

Bonds are slumping and that’s given the dollar some new life.

US 10-year yields are up 4 bps to 1.31%. The high yesterday was 1.33%.

Similarly, long bonds are up 5.8 bps and about 2 bps from yesterday’s high. 30s have broken above a channel and are having a look at the Feb 2020 levels.

Dollar off the lows

There is a push-and-pull ongoing with the dollar, the risk trade and stocks that’s struggling to find a solid base.

The market doesn’t seem to mind higher yields until we get +5 bps daily moves and then it starts to look a bit panicky.

With the latest pop in yields AUD/USD has given back most of its gains, falling to 0.7763 from a high of 0.7790 a short time ago.

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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