The USD index moved off early NorAm lows to trade up 0.23% in the U.S. afternoon after below-forecast jobless claims reduced March Fed rate cut expectations to 60%, according to LSEG’s IRPR page, as recent data indicates the U.S. economy may not be slowing as earlier thought.
U.S.
Treasury yields rose after the claims data, aiding the dollar’s rise, though the front-end caught a bid into the NorAm close, tempering earlier USD gains.
EUR/USD fell 0.22% to 1.0858, as traders remained focused on falling euro zone growth.
USD/JPY reversed overnight low-yield-related weakness after the claims data, rising to 148.30.
Bulls were unable to take out Wednesday’s 148.53 high as the post-data UST yield rise stalled.
Traders took a defensive tack ahead of Japan CPI on Friday, lightening recent longs, despite there being little expectation of the data prodding a pivot to higher rates by the BoJ.
Assuming the data does not surprise higher, the bias for USD/JPY will be higher still as U.S.-Japan yields diverge further.
GBP/USD held a slight gain in New York afternoon trading, gaining 0.14% to 1.2692.
The overnight high at 1.2705 brought out offers, as it has for most of 2024, though despite the inability of bears to build on gains above 1.27, the shallow dips hint at an underlying bid near 1.26.
Though the claims data has diminished Fed rate cut expectations, UK data, most recently Wednesday’s CPI, came in hotter than forecast indicating the BoE is not likely to pivot to rate cuts in the near-term, which is propping up the pound.
AUD/USD rose 0.15% to 0.6561, and USD/CAD was flat at 1.3504, with oil and copper rises aiding commodity-centric currencies.
Bitcoin moved 2.75% lower to $41.5k, hitting a new 1-month low at $41.3k.
BTC has been offered after reaching a 21-month high at $49k on Jan 11.
Higher global yields are no tonic for crypto holders.
Despite the dip from the highs BTC is only down 1% year-to-date
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