That is one equation in markets that more often than not, doesn’t make much sense. But the flows are showing up that way so far in European trading, with the dollar losing ground now across the board. EUR/USD is up 0.3% to 1.0886 at the highs for the day:
EUR/USD hourly chart
The pair is running into some near-term resistance though, from the 100-hour moving average (red line) at 1.0887. The 200-hour moving average (blue line), now seen at 1.0901, will remain a key level to watch as well as it had previously held gains since the end of last week.
Meanwhile, GBP/USD is up 0.5% to 1.2770 with the June highs at 1.2840-48 perhaps starting to get called back into question.
Elsewhere, AUD/USD is up 0.4% to 0.6680 and NZD/USD up 0.6% to 0.6215 currently – both at the highs for the day as well.
This comes despite a somewhat softer risk mood in broader markets. Treasury yields are at the highs for the day with 10-year yields up 3.6 bps to 3.981%. However, that is not enough to prop up USD/JPY which is down 0.6% to 143.80 levels currently.
In the equities space, there’s still an air of negativity with US futures down roughly 0.4% and European indices are down over 1% across the board.
That is certainly making it tough to reconcile the flows above and US data later might make things even trickier.