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  • Markets start the week in a calm manner on Monday.
  • US Dollar Index advances to 99.30 area ahead of mid-tier data releases.
  • 10-year United States Treasury bond yield posts modest gains.

The USD/JPY pair lost its traction on Friday on reports claiming that the Trump administration was considering limiting investor portfolio flows into China and removing Chinese companies from stock exchanges in the United States (US). After erasing a portion of its weekly gains, the pair closed at 107.94 and started the new week in a quiet manner. As of writing, the pair was virtually unchanged at 107.96.

The fact that a US official denied these reports caused the risk-off flows to lose control of the market action and the 10-year US Treasury bond yield staged a modest rebound. At the moment, the yield is up 1% on the day.

Furthermore, the data from China revealed that the business activity in the manufacturing sector contracted at a slower pace than expected in September to further improve the sentiment.

USD remains strong at the start of the new week

Meanwhile, the protracted selling pressure surrounding major European currencies allowed the Greenback to preserve its strength and build on last week’s gains. Ahead of the ISM Chicago’s Purchasing Managers’ Index (PMI) and the Dallas Fed’s Manufacturing Index data, the US Dollar Index is up 0.15% on the day at 99.27, helping the pair stay afloat near the 108 mark.

Technical levels to watch for