A Bloomberg gauge of the dollar advanced for a third session, buoyed by higher Treasury yields and a softening in the rally in risk assets to start the week.
- The euro fell to its weakest mark since 2022 versus sterling.
- The Bloomberg Dollar Spot Index rises 0.3%, trades near one-week high
- Treasuries fall across curve, two-year yield up 3.9bp to 4.16%
- Traders await US CPI data for clues on the Federal Reserve’s rate path
- “Though market sentiment is solidifying on a cut next week, bets on a subsequent cut in January have been reduced substantially and it now looks like an either/or situation when it comes to easing,” said Helen Given, a currency trader at Monex USA
- EUR/GBP fell 0.4% to 0.82441, the lowest level since March 2022
- Bets the Bank of England will cut interest rates less aggressively than the European Central bank are supporting sterling
- USD/JPY reverses an earlier drop to trade as much as 0.6% up at 152.17
- The Bank of Japan should raise its benchmark interest rate early, and it faces the risk it has already fallen behind the curve, according to a prominent economics professor who was an adviser to the prime minister
- Commodity currencies trade weaker as Monday’s risk rally eases
- AUD/USD falls as much as 1.1% to 0.6366 low after RBA meeting, where officials signaled confidence inflation is slowing; NZD/USD down as much as 1.2% to 0.5793 low
- Read More: RBA’s Growing Confidence on Inflation Sees Jump in Rate-Cut Bets
- Loonie swings between gains and losses ahead of Wednesday BOC meeting, USD/CAD little changed at 1.4170
Reporting by Carter Johnson, Alice Atkins and Michael G. Wilson
