US DOLLAR PRICE VOLATILITY REPORT: USD WEAKENING RESUMES AMID PULLBACK IN TREASURY YIELDSUSD value motion is buying and selling o
US DOLLAR PRICE VOLATILITY REPORT: USD WEAKENING RESUMES AMID PULLBACK IN TREASURY YIELDS
- USD value motion is buying and selling on its again foot once more as Treasury yields retreat from final week’s rally
- DXY Index perched round its weakest stage in two-years amid sustained US Greenback weak spot
- FOMC minutes and Markit PMI knowledge on faucet for launch may spur forex volatility
US Greenback weakening seems again in full pressure this week because the DXY Index approaches two-year lows. USD value motion is on the defensive once more after notching a short reduction bounce alongside surging Treasury yields. The aggressive rise in Treasury yields seemingly helped enhance the USD, however as sovereign rates of interest start to retreat, earmarked by ten-year Treasury yield slipping again beneath 70-basis factors, the US Greenback is coming again underneath strain.
DXY INDEX – US DOLLAR PRICE CHART & TEN-YEAR TREASURY YIELD OVERLAID: 2- HOUR TIME FRAME (05 AUG TO 17 AUG 2020)
Chart created by @RichDvorakFX with TradingView
Additionally, it’s attainable that the newest stretch decrease by the US Greenback corresponds with FX merchants gearing up for the scheduled launch of FOMC minutes due this Wednesday, August 19 at 18:00 GMT. Within the wake of the final Fed assembly, it was famous how US Greenback weak spot may linger contemplating the central financial institution echoed its dedication to holding monetary circumstances accommodative and choice to prolong USD swap traces.
USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (1-WEEK)
With US Greenback shorts hitting nine-year highs in accordance with the newest COT Report, nevertheless, one may argue that this commerce is getting overcrowded and that the bullish contrarian thesis is rising louder. On that observe, a resurgence of forex volatility stands out as one potential catalyst that may gasoline a reversal larger by the US Greenback.
However, as EUR/USD builds a variety, it’s attainable that the broader DXY Index continues to float sideways. Choices-implied buying and selling ranges are calculated utilizing 1-standard deviation (i.e. 68% statistical chance value motion is contained throughout the implied buying and selling vary over the required time-frame).
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— Written by Wealthy Dvorak, Analyst for DailyFX.com
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