Forex Today: Dollar up as recession fears sound out loud
|What you need to take care of on Tuesday, June 7:
The market sentiment changed from optimism during Asian trading hours to pessimism during US ones. The early good mood was backed by hopes that the global economic situation would start improving after Beijing continued lifting coronavirus-related restrictions.
The sentiment turned south with Wall Street's open, as investors fear the US Federal Reserve will maintain its aggressive momentary policy, which will boost the chances of a recession in the country. The upbeat Nonfarm Payrolls report released last Friday underpinned such speculation.
US Treasury yields soared, with the yield on the 10-year note yielding as much as 3.04%.
The American dollar started the day on the back foot but strengthened in the second half of the day, ending the day with gains against all of its major rivals.
The EUR/USD pair is sub-1.0700, although action around it was limited by a holiday in Europe. GBP/USD trades around 1.2530 after UK Prime Minister Boris Johnson's confidence vote. 211 Conservatives voted in favor of Johnson, while 148 said they had lost confidence in the PM.
Commodity-linked currencies trimmed early gains and settled around their opening levels, with AUD/USD hovering around 0.7200 and USD/CAD trading around 1.2580.
Safe-haven assets were among the worst performers. Gold is down to trade around $1,841 a troy ounce, while USD/JPY reached a fresh multi-year high of 132.00, now a handful of pips below the level. The USD/CHF pair is up to 0.9705.
Crude oil prices edged lower, with WTI now trading at $118.20 a barrel.
The Reserve Bank of Australia takes centre stage as it will announce its monetary policy decision early on Tuesday.
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