- US Dollar Index stays near 98 handle.
- 10-year US T-bond yield extends its slide.
- Risk-aversion continues to dominate the markets.
Despite the broad-based USD strength, the USD/JPY pair remains under pressure as the JPY continues to outperform its rivals with investors staying away from risky assets. As of writing, the pair was trading near 109.30, staying dangerously close to the 4-month low that it set earlier this month near 109.
The 10-year U.S. Treasury bond yield, which shows a strong correlation with the pair, is losing more than 1% on Wednesday and is now at its lowest level since September 2017 at %2.226 to reflect the sour market sentiment. Additionally, the S&P 500 Futures is down 0.56% on the day to suggest that Wall Street is likely to open the day in the negative territory.
None of the latest headlines surrounding the U.S.-China trade conflict hint that the war is unlikely to be resolved anytime soon. Chinese Foreign Ministry Spokesman Lu Kang earlier today said that the U.S. was not in a position to decide who was a currency manipulator. On the other hand, during an interview with Fox Business, the U.S. Secretary of State Pompeo called Chinese tech-giant Huawei an “instrument of the Chinese government.”
The economic docket in the U.S. on Wednesday will feature the Richmond Fed Manufacturing Index, which is likely to be ignored by the participants. Meanwhile, the US Dollar Index is up 0.07% on a daily basis at 98.01. Wall Street’s performance and the T-bond yields are likely to continue to drive the pair’s price action.
Technical levels to consider
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