The US Dollar (USD) is attempting to stabilize after experiencing a selloff in the American session on Monday. The US Dollar Index, which measures the performance of the USD against a basket of other major currencies, has recovered slightly from its 10-day low of 101.20, which it reached during early Asian trading hours.
Today, the US economic docket includes a few mid-tier data releases, including the February Housing Price Index, March New Home Sales, and the Conference Board’s Consumer Confidence Index for April.
US Treasury bond yields declined by more than 2%
The decline in US Treasury bond yields had a significant impact on the USD, causing it to weaken on Monday. This was primarily due to the benchmark 10-year US Treasury bond yield losing more than 2% and falling below 3.5%, for the first time since April 14. Despite this, the USD is attempting to recover early on Tuesday, with the US Dollar Index showing signs of stabilizing after hitting a 10-day low.
However, the 10-year yield is currently struggling to rebound. In addition, US stock index futures are trading lower in the European morning, while Wall Street’s main indexes closed with mixed results on Monday. Later in the day, the US economic docket will feature the February Housing Price Index, March New Home Sales, and the Conference Board’s Consumer Confidence Index for April.
Due to the USD’s decline, the EUR/USD pair saw significant gains on Monday. Since there will be no significant data releases from the Euro area, the USD’s valuation and ECB policymakers’ remarks will determine the pair’s movement, which is currently consolidated around 1.1050.
On the other hand, the GBP/USD pair also closed higher on Monday and continued to climb during Asian trading hours on Tuesday. However, it encountered resistance at 1.2500 and is currently trading slightly lower at around 1.2470.
USD/JPY traded flat and continued to trade in a tight range on Tuesday. BoJ Governor Kazuo Ueda stated that the risk of inflation undershooting forecast is greater than the risk of overshooting.
Finally, gold prices benefited from the falling US yields and edged higher toward the key $2,000 level on Tuesday.
