Dollar Struggling to Hold Steady, Eyes Bond Yields

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The US dollar seems to be struggling to maintain the rare rally back on Monday at its biggest losing streak in almost 10 years left the market significantly short of the currencies and prone to a squeeze on the upbeat news.Also, bears were caught out by much better pUS DOLLARayrolls report back on Friday that nudged the Treasury yields high into the week’s huge $112 billion debt sales. On the other hand, the dollar still finished lower for a 7th consecutive week.

On Monday, the euro rose to $1.1791 after it hit a 2-year high at $1.1915 last week that currently works as the major resistance. The support comes at between $1.1694 and $1.1755.

The turnover was very light with Japan on a holiday and the significant uncertainty with regards to whether the US lawmakers might agree on a new package for the financial support for this virus hit economy.

On Sunday, Steven Mnuchin, the Treasury secretary and the House Speaker Nancy Pelosi stated that they are open to restarting coronavirus stimulus tasks after president trump issued an executive order on jobless benefits.

Against a series of currencies, the US dollar was slightly stronger at 93.339 and only above a 2-year trough as the Canadian Dollar Weakens on Manufacturing Crash, Capped by Crude Rally.

The US dollar was slightly stronger on the Japanese yen at about 105.75, just over the fresh low at 104.17 but facing firm resistance of 106.46.

Traders were worried about the recent escalation in US-China tensions with the trade talks that are scheduled for 15 august even as president trump imposed sanctions on top Chinese and Hong Kong officials.

With regards to the data front, the USA has retail sales and consumer prices on Friday and Wednesday respectively. It is highly likely that this will show a firm bounce in the expenditure notwithstanding before the most recent social interactions slowed the pace at which the economy was growing.

The raft of the Sino figures due this week, which is an estimate to show the continued recovery, whereas the Eurozone manufacturing data is, expected to rise.

The data showed Beijing’s factor deflation eased back in July, driven by the surge in global prices of oil and the industrial activity rose towards pre-COVID-19 levels.

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