Despite the Fed's Goolsby's dovish comments, the US dollar is rising across the board.
Markets continue to try to adjust Fed policy, with a 136 bps rate cut currently priced in for the rest of the year, bringing the rate cut in March to 55%. Bonds started the year very well and have been giving back little by little. The yield on the US 10-year bond is now up 2.7 basis points to 4.17%. The bottom price was 3.78% on December 27th, so this is a significant increase.
The dollar will continue to be supported as yields rise, and so far economic indicators are pointing in that direction. This week we received strong reports of low U.S. retail sales and first-time unemployment claims. Get the latest his UMich Consumer Sentiment Report at the beginning of the hour. Although it is a low-quality economic indicator, it is still a factor that moves the market.
Equities could also help push the dollar higher as pre-market strength reverses after the open. The S&P 500 is up just 7 points, all (again) in the Magnificent 7 stocks. Nvidia has launched 17% year to date.
AUD/USD rebounded nicely yesterday, and that continued into today's trading, but it evaporated in the last hour, ending the day with a gain of just 5 pips.
