US Treasury 10-year yields (%) daily chart
It’s now a question of whether there will be follow through in US trading later. And more importantly perhaps, in which direction will traders lean towards before the end of the day? If yields are to break much higher from hereon, it should rightfully underpin the dollar further. However, the reaction so far to yields touching 5% is rather muted.
I reckon that sort of tells us the balance of risks are lying more towards the downside for the greenback. That is if yields fall off and retrace from 5% instead, the dollar has more room to fall at the moment. But we’ll see.