The US dollar eased somewhat but was still at a safe distance from the post-Fed meeting lows, with traders still favoring the greenback in the medium-term as their preferred currency due to expectations of an interest rate hike in the US later in the year.
In bond markets, the dollar received some support after US 10-year yields recovered from a dip to as low as 1.89% the previous day to trade around 1.95% during today’s Asian trading. 10-year yields were as high as 2.26% as soon as 1 ½ weeks ago.
In the main news item of the day, the Bank of Japan minutes showed some concern about achieving the 2% inflation target but there was also concern about increasing the stimulus. The Japanese consumer was also not faring as well as hoped for, but exports and factory output were more positive. Dollar / yen was steady around 120.75. Dollar / yen’s failure to extend the new highs above the 122 mark hit a few days after the strong February jobs numbers earlier in the month, has meant range-trading for the pair lately.
The euro received some support from what seemed to be a positive outcome from an EU leaders’ summit, during which Greece pledged it will deliver additional reforms that will unlock aid for the country. The euro was trading around 1.0678 as it traded in the 1.0650-1.07 range throughout the session.
Overall the remainder of the day will be a slow one in terms of economic releases and events and the market is expected to focus on Canadian inflation and retail sales as well as a couple of Fed speakers.