- USD/JPY drops below 107.00 during the American session.
- Major equity indexes in the US extend rally on Wednesday.
- US Dollar Index remains on track to close the day in the red.
The USD/JPY pair remained under bearish pressure after dropping below 107.00 and touched a daily low of 106.67 during the early American trading hours. Although the pair staged a rebound in the last hours, it’s still losing 0.28% on the day at 106.93.
USD selloff continues on Wall Street rally
The strong inverse correlation between the USD’s performance and Wall Street remains as the primary driver of the FX markets on Wednesday. Major equity indexes in the US opened the day decisively higher on coronavirus vaccine optimism and caused the USD to face another selling-wave.
With the S&P 500 (SPX) advancing to its highest level since late February at 3,238, the US Dollar Index (DXY) slumped to its lowest level in more than a month at 95.78. At the moment, the SPX is up 0.82% on the day and the DXY down 0.15% at 96.05, is looking to close the fourth straight day in the negative territory.
Earlier in the day, the data published by the Federal Reserve revealed that Industrial Production in June increased by 5.4% and came in better than the market expectation of 4.3%. Additionally, the Federal Reserve Bank of New York’s Empire State Manufacturing Index improved from -0.2 in June to 17.2 in July.
During the Asian session on Thursday, Industrial Production and Gross Domestic Product (GDP) data from China will be watched closely by market participants due to these data’s potential to impact risk sentiment.
Technical levels to watch for
Share
