US Dollar Keeps Strength towards NFP

A sell-off at the long end of the US Treasury market has cast a shadow over risk assets and hit cyclical currencies. The dollar has been the main beneficiary. Expect focus to remain on the US bond market very much into next week's quarterly refunding.

A sell-off at the long end of the US Treasury market has cast a shadow over risk assets and hit cyclical currencies. The dollar has been the main beneficiary. Expect focus to remain on the US bond market very much into next week's quarterly refunding.

USD: Tracking Treasuries.

In Wednesday's session, the focus was on the US bond market and the significant sell-off observed at the long end of the curve. Notably, US 30-year Treasury yields saw a brief surge of 15 basis points. This movement was quite different from the previously observed benign and bullish diversion of the curve after the soft June CPI print. Instead, it resulted in a more negative bullish steepening.

The rise in risk-free rates had a notable impact on US growth stocks, with the Nasdaq experiencing a 2% decline. Moreover, this surge in rates also affected 'growth' currencies, including the commodity complex and the underappreciated Scandi currencies.

Yesterday's market movement was primarily influenced by the US fiscal situation. While the Democrat administration and its media supporters were critical of Fitch's decision to strip the sovereign's AAA status on Tuesday evening, there are legitimate concerns surrounding the US fiscal dynamics. Interestingly, it seems that the timing of Fitch's release was well-considered.

In addition to Fitch's decision, there was also a slightly higher-than-expected US quarterly refunding announcement, revealing plans to sell $103 billion worth of 3, 10, and 30-year bonds in the upcoming week. This further underscored the significance of fiscal dynamics in the market on that day.

The impact of these fiscal concerns was evident in wider US asset swap spreads, with Treasuries underperforming the US swap curve, and in the steepening of the US yield curve. These developments suggest that market participants were closely monitoring the fiscal situation and adjusting their positions accordingly.

As mentioned earlier, the rise in risk-free rates is causing headwinds for risk asset markets, particularly equities. This has also led to slightly higher cross-market volatility readings, which might prompt investors to reduce exposure to carry trade strategies. As a result, the Japanese yen and Swiss franc could benefit in these circumstances, while high-yield currencies may face challenges.

Today's attention is also drawn to the performance of the Brazilian real after Brazil's central bank initiated an easing cycle with a 50 basis points cut and pledged similar cuts in the future meetings. Given the current international environment, the currency could see a slight decline today.

The DXY could gradually move towards the 103.50 area.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.

ACY Securities
タイプ: STP, ECN, Prime of Prime, Pro
規制: ASIC (Australia), FSCA (South Africa)
read more
EUR/USD Under Downward Pressure

EUR/USD Under Downward Pressure

The euro is facing sustained selling pressure, primarily driven by a robust US dollar. The greenback is being bolstered by rising Treasury yields and fading market expectations for an early start to the Federal Reserve’s easing cycle.
RoboForex | 4時35分前
Japanese bulls went to recharge

Japanese bulls went to recharge

For the first time in Japan, a woman has become prime minister. Takaichi’s position (stimulating the economy and lowering interest rates) has led to speculative buying in Japanese stocks
FxPro | 5時1分前
ATFX Market Outlook 21st October 2025

ATFX Market Outlook 21st October 2025

US equities surged on Monday, with financial and technology shares providing most of the upside. Optimistic quarterly earnings revived risk appetite, while concerns about regional banks’ credit quality eased. The Dow gained 1.12%, the S&P 500 rose 1.07%, and the Nasdaq advanced 1.37%. The US Dollar Index edged higher alongside Treasury yields.
ATFX | 5時44分前
Dollar advances as markets remain cautious

Dollar advances as markets remain cautious

Dollar extends gains as US equity futures turn slightly lower; Trump’s tariff rhetoric fails to dent investor confidence; Gold retreats after fresh all-time high; oil weakness persists; Yen resumes its underperformance after Takaichi is elected as PM;
XM Group | 6時21分前