The greenback managed to reestablish itself in trading yesterday, with the euro softening after a weak set of PMI data. The run is continuing today as equities are looking troubled while Treasury yields are also slightly higher. 10-year yields are up 2.8 bps to 4.867% and that is helping to keep the dollar underpinned, with USD/JPY continuing to hover just below 150.00:
USD/JPY daily chart
Now, there is a significantly large set of option expiries for the pair due on Friday at the 150.00 mark. However, that might not even get a chance to factor into play if we do see a psychological break of the figure level in the sessions ahead – that is if Tokyo decides not to draw a hard line on any further yen weakness.
But even outside of USD/JPY, the dollar is finding itself in a good spot with EUR/USD down another 0.2% to 1.0570 and GBP/USD down 0.3% to 1.2120 on the day.
The Australian dollar was the top performer in Asia but has slumped in European trading, with AUD/USD now down 0.3% to 0.6335 after having traded to near 0.6400 earlier in the day. The downside channel here is still the key thing to watch for the pair, even if traders are looking to step up bets on a RBA rate hike next month.
If anything else, keep an eye out on the 5-year Treasury auction coming up later today. That could yet jolt markets a fair bit more before the end of the day.