The dollar was extending gains that saw the first positive weekly performance of the year last week, as traders braced for two days of Capitol Hill testimony from Fed chair Janet Yellen.
Absent any significant economic data in the U.S. today, euro-dollar fell to its lowest since Jan. 19 as as Treasury yields and stocks both rose amid modest trading flows. Traders will parse Yellen’s remarks Tuesday and Wednesday to see if she tries to guide expectations for a rate hike at the Fed’s March meeting higher than the current ~32%. Traders are also anticipating inflation and retail sales data later this week to gauge the health of the economy.
Traders say that while higher rates in the U.S. likely will underpin the dollar, there’s still some caution about building longs given the risk that President Trump may talk the currency down. With Treasury Secretary-nominee Mnuchin still awaiting confirmation, Trump has thus far been the primary administration voice on the currency.
Bloomberg dollar index was up ~0.3% after rising more than 0.6% last week, with the dollar gaining against all G-10 peers.
EUR/USD traded to a fresh low under 1.0600 as residual bids ahead of 1.0600 were filled; further bids are scattered down to 1.0580 though traders caution that there also stop-loss sell orders mixed in, potentially to make for choppy trading
EUR may find tech support at 1.0580 from the Jan. 16 low, a breach may open declines toward the January 11 low at 1.0454
USD/JPY has climbed back to above 114.00 after a shallow retreat from session high at 114.17 where offers capped
Pair is supported by rise in Treasury yields and also by U.S. stocks, which are up ~0.4% with the Dow Jones Industrial Average at a fresh record
Offers from Japanese exporters are layered above 114.20 and may slow USD gains, a trader saidLabels: business, latest, stock