There was a bit of a breather yesterday with US markets closed but with the return of Treasuries today, or more specifically the selling of bonds, that is helping to prop the dollar higher across the board. The greenback is leading the way in the major currencies space with EUR/USD falling 0.3% to its lowest levels since June:
EUR/USD daily chart
The break back below the 200-day moving average (blue line) on Friday last week was a warning signal already and now dollar bulls are looking to establish the next leg lower in the pair.
It also comes as USD/JPY is racing up to test 147.00 again with plenty of breathing room now as noted earlier here.
As Treasury yields hold higher with 10-year yields up 4.3 bps to 4.216% currently, it is also weighing on the equities mood with S&P 500 futures now down 0.3% on the day. European indices are also faring poorly, down by around 0.6% to 1.0% at the moment.
In turn, this is further weighing on commodity currencies with the antipodeans hurt the most. China worries were already a factor earlier on but the downside is intensifying now with AUD/USD down 1.3% to 0.6370 levels:
AUD/USD daily chart
The pair is contesting short-term support at around 0.6380 now with the August low of 0.6364 one to watch before sellers start to chase a move towards 0.6200 next.