There’s no displacing the dollar as we get things started on the week as the currency is maintaining its earlier gains and keeping in a solid spot so far on the day. The nudge higher in the dollar today comes alongside the same kind of moves that we have observed in April i.e. higher bond yields and softer equities.
A couple of posts about the moves so far today:
EUR/USD is down 0.4% to 1.0505 while USD/JPY is keeping above 131.00 at 131.10-20 levels, up 0.5% on the day. Meanwhile, GBP/USD is down to its lowest since June 2020 as the pair is trading 0.5% lower around 1.2275. The aussie and kiwi are also rather battered amid more dour risk sentiment. AUD/USD is flirting with the 0.7000 handle now, down 1.1% on the day.
A key spot to watch for the dollar that isn’t getting enough attention in my view is the move in the Chinese yuan:
USD/CNY has traded above 6.70, with the domestic session ending above the key level for the first time since November 2020. The fact that China is continuing to allow for a weaker currency also doesn’t bode well for risk currencies in general. At the same time, that provides another tailwind for the dollar – even if it isn’t the most noticeable one.