- Dollar Loses Momentum Amid Falling US Yields
- After US jobless claims, attention turns to Friday’s non-farm payrolls.
- USD/JPY fails again on the break of 134.50 and falls sharply.
The USD/JPY fell again after the start of the American session and marked a new daily low at 133.02. The weakness of the US dollar weighed on the pair.
US data in the spotlight
Economic data released in the US on Thursday showed continued claims rising to the highest level since March; while initial applications rose to 260,000. The trade deficit narrowed to $99.5 billion in June, the lowest in five months.
The official US employment report will be released on Friday. The market consensus is for payrolls to increase by 250,000. “The data surprises have been strongly correlated with a wide move in the dollar. A print above consensus should leave a slightly firmer tone, but I would expect price action to be somewhat contained. down but should be contained above 1.01 USDJPY faces further upside extension risk if it breaks 134.80/00,” analysts at TD Securities explain.
The dollar is falling modestly across the board on Thursday. The 10-year yield in the US stands at 2.67% and the 30-year yield trades at 2.96%. On Wall Street, the Dow Jones falls 0.27% and the Nasdaq 0.37%.
The combination of lower US yields and negative risk sentiment is favoring the yen. The Japanese currency is among the best performers. USD/JPY is close to the 133.00 area, a break lower could open the doors for more losses, with the next support at 132.70 followed by 132.20. To the upside, above 134.50 the dollar should strengthen.
Technical levels
Source: Fx Street
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