US Dollar Index (.DXY) Pressed Session Highs, US Treasuries Off
Chicago (June 10) The US Dollar Index (.DXY) pressed session highs near 80.85 as trade comes to a close. Tuesday’s action has DXY up for a 3rd straight day and has it looking at its best close since early February.
•EUR/USD is -55 pips at 1.3535 as trade falls to a 4 month low. The Euro tested the Key 1.3600 mark for much of the overnight session before a breakdown caused selling down to current marks. Support in the 1.3500 zone is now the focus.
•GBP/USD is -55 pips at 1.6745 as trade is back below the 50-Day MA. Cable saw early selling in response to the manufacturing production miss and has moved lower, as NIESR GDP Estimate (0.9%) fell short. Attention turns to support at 1.6700. British data was heavy.
•USD/CHF is +30 pips at .9000 as trade remains on track to close at a 4 month high. Tuesday’s advance marks a 3rd day running of gains, the action looking at its 1st close above the 200-Day MA since September.
•USD/JPY is -20 pips at 102.35 as action holds at its best levels of US trade. The pair fell to session lows near 102.20 following the tertiary industry activity miss, found support there, buyers stepped up to defend support and both the 50 and 100-Day MAs. Japan’s BSI Manufacturing Index is due tonight.
•AUD/USD is +10 pips at .9360 as action looks likely to book its 5th gainer in 6 days. The Aussie has found buyers despite the disappointing ANZ Job Advertisements and home loans data as a negative Chinese PPI print brought speculation the People’s Bank of China (PBOC) would move to support the Chinese economy, which would help the Australian economy. Resistance holds near .9380. Australian data limited to Westpac Consumer Sentiment.
•USD/CAD is +10 pips at 1.0915 as trade ticked higher in uneventful trade. Tuesday’s action was limited to a tight 30 pip range as Bulls are in to defend support at 1.0900. A break there puts 1.0825 in sight.
US Treasuries fell for the 8th time in 9 sessions. Weakness was not unexpected on no tradable news. The complex saw steady selling into the cash open and pressed to its worst levels in response to the larger than anticipated build in wholesale inventories (1.1% actual Vs 0.3% expected).
Trade drifted near the lows into the average $28-B 3y T-Note auction. The auction drew 0.930% (WI 0.927%) and a better than average 3.41x bid/cover. A light indirect bid (26.4%) was offset by the solid direct bid (19.4%), leaving primary dealers with 54.2% of the supply.