The US dollar is at fresh session lows as Treasury yields slip. Earlier I highlighted dollar selling but noted that the bond market wasn’t a part of the move. That may be changing now with US 10-year yields down 3 bps and 2s down 6.7 bps.
The soft jobless claims number has convinced some in the market that the economy is turning and that the Fed is done. A skip in June is up to 77% and there are just 18 bps priced in for July now. The market is starting to think that the FOMC is done.
GBPUSD 1 hour chart
What will be important going forward is the US 2-year yield, especially if other central banks continue to hike.
Right now it looks like it could be topping.
US 2 year yield
Up next is the US wholesale sales report at the top of the hour. It’s not normally a market mover but a soft reading today would add to the dollar-selling momentum.