- US Dollar Index climbs to fresh two-month highs above 98.
- Upbeat macroeconomic data from US help greenback find demand.
- 10-year US Treasury bond yield extends rally, adds nearly 3%.
The USD/JPY pair extended its rally into the third straight day on Wednesday and climbed higher toward the 110 handle before going into a consolidation phase during the American trading hours. As of writing, the pair was up 0.22% on the day at 109.75.
The broad-based USD strength and the upbeat market mood on Wednesday helped the pair preserve its bullish momentum. Heightened hopes of scientists producing a cure for the coronavirus faster than initially estimated provided a boost to the risk appetite.
Major European equity indexes closed the day with decisive gains and Wall Street’s main indexes opened the day sharply higher. Additionally, the 10-year US Treasury bond yield, which rose nearly 5% on Tuesday, was last seen rising 2.75%.
US economy starts 2020 on strong footing
The data published by the ADP showed that the US private sector added 291K jobs in January, the most since May 2015, and the business activity in the service sector continued to expand at a robust pace in January. Moreover, the IHS Markit’s Services PMI improved to 53.4 in January’s final reading and the ISM’s Non-Manufacturing PMI came in at 55.5 to beat the market expectation of 55.
Supported by the strong data, the US Dollar Index touched its highest level since early December at 98.32.
There won’t be any significant macroeconomic data releases featured in the Japanese economic docket and the risk perception is likely to continue to drive the pair’s action during the Asian session.
Technical levels to watch for
Share
