- DXY Hits Decade Highs, Treasury Yields Jump.
- EUR/USD at lows in years below parity.
- Emerging currencies also fall sharply.
The US inflation figure was higher than expected in June, which reinforced expectations of aggressive increases in interest rates by the Federal Reserve, triggering a rally in the dollar and pulling stocks down.
The DXY is at a decade high above 108.50, while at the same time Treasury yields soared. The 10-year bond went from 2.95% to 3.06%, while the 30-year tranche went from 3.15% to 3.22%.. This reflected expectations of more tightening by the Fed.
Wall Street futures went from positive ground to sharp declines in a matter of minutes. Nasdaq futures fall 2.10% and S&P 500 futures lose 1.50%.
Risk aversion coupled with rising Treasury yields added fuel to the dollar and added negative pressure to emerging market currencies. USD/MXN climbed towards 21.00, reaching the highest in months, while USD/CLP jumped to a record high.
The EUR/USD fell to 0.9998, rather than bounce slightly. GBP/USD moved from 1.1930 to below 1.1850. USD/JPY broke above 137.50 and AUD/USD dipped below 0.6750.
The Prayed it lost more than $20 and fell towards $1700, the lowest level since August 2021. Even Bitcoin was affected and lost $1000 falling to $18800.
Source: Fx Street
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