The US Dollar rose overnight once again, propelled higher by rising US yields, hawkish Fed-speak and perhaps some delta-variant risk-hedging flows. The dollar index rose by 0.20% to 92.97 overnight, with a resistance test at 93.20 seemingly inevitable. That will open further gains to 93.50 and then 94.30. Only a fall through 92.60 changes the narrative.
As markets underestimate Fed's hawkishness, the dollar is set to rise
EURUSD today is near a 4-month low at 1.1730, less than 30 pips above the lows of late March. The 1.16-1.17 area has repeatedly acted as support in the pair over the past 13 months.
· Asian currencies weaken amid Fed taper talk
Asia's emerging currencies traded flat-to-weaker on Tuesday against a strong dollar, as upbeat U.S. jobs data fanned hopes that the Federal Reserve might start tapering its stimulus, and as COVID-19 curbs in various parts of the region hurt sentiment.
S.Korean won leads losses among Asian currencies
The South Korean won shed 0.4% to lead losses, while the Thai baht and Taiwan dollar were flat.
Yuan edges up on demand, dampened rate cut expectations
China's yuan inched higher against the dollar on Tuesday, as strength in the greenback was offset by stronger demand for the Chinese currency and as rate cut expectations eased.
In the spot market, onshore yuan opened at 6.4830 per dollar and was changing hands at 6.4802 at midday, 60 pips firmer than the previous late session close.
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