- 10-year US T-bond yield gains 2% on Wednesday.
- US President Trump said it’s possible to make a deal with Xi at G20.
- US Dollar Index struggles to extend its rebound.
Following the sharp upsurge witnessed during the European trading hours, the USD/JPY pair has gone into a consolidation phase and is now moving in a relatively tight range in the upper half of its daily trading range. As of writing, the pair is up 0.5% on the day at 107.70.
Earlier today, U.S. Treasury Secretary Mnuchin said that the trade deal with China was 90% completed to revive hopes of the U.S.-China trade conflict finally coming to an end. On a similar note, during an interview with Fox Business Network, President Trump stated that it was possible to reach an agreement on trade when he meets his Chinese counterpart Xi on the sidelines of the G20 summit this weekend.
Boosted by these remarks, the 10-year U.S. Treasury bond yield gained traction and was last up more than 2% to reveal a strong risk-appetite, which makes it difficult for the safe-haven JPY to find demand. Furthermore, major equity indexes in the U.S. started the day in the positive territory to confirm the upbeat sentiment.
On the other hand, today’s uninspiring data releases from the U.S. didn’t allow the US Dollar Index to continue to push higher, keeping the pair in a neutral state. The U.S. Census Bureau today announced that durable goods orders declined by 1.3% in May and the goods trade deficit rose to $74.55 billion in the same period.
Retail trade figures from Japan will be coming up next in the Asian session. In the second half of the day, first-quarter (final) GDP data from the U.S. will be watched closely by the participants.
Technical levels to consider
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