Forex Today: Dollar gains traction on rising US T-bond yields

Eren Sengezer FXStreet

Here is what you need to know on Tuesday, February 8:

The benchmark 10-year US Treasury bond yield continues its march toward the key 2% mark early Tuesday, helping the greenback preserve strength against its major rivals. December Trade Balance, NIFB Business Optimism Index and the IBD/TIPP Economic Optimism Index data will be featured in the US economic docket in the second half of the day. Meanwhile, US stocks futures are trading in the negative territory after posting modest losses on Monday.

Crude oil prices seem to have gone into a consolidation phase following last week's upsurge. The barrel of West Texas Intermediate (WTI), which touched its highest level since September 2014 at $93.13 on Friday, was last seen trading flat on the day near $91.50. Talks on bringing back the 2015 Iran nuclear deal is set to continue in Vienna on Tuesday.

WTI Crude Oil bulls accumulating energy for a new surge, levels to watch.

EUR/USD is edging lower toward 1.1400 on renewed dollar strength and European Central Bank President Christine Lagarde's comments. While speaking before the EU Parliament, Lagarde said that there were no signs of inflation measurably exceeding the 2% target in the medium term. "We need more than ever to maintain flexibility and optionality in the conduct of monetary policy," Lagarde repeated.

GBP/USD closed flat after testing 1.3500 on Monday and continues to trade in a very narrow range on Tuesday.

USD/JPY is trading at its highest level in more than a week at 115.50, supported by rising US T-bond yields.

Gold advanced to its strongest level in 10 days above $1,820 on Monday. XAU/USD is having a tough time gathering bullish momentum early Tuesday.

AUD/USD stays quiet above 0.7100 after rising decisively on Monday. During the Asian trading hours, the data published by the National Australia Bank showed that Business Confidence Index improved to 3 in January from -12 in December.

Bitcoin keeps its footing after breaking above $40,000 and was last seen rising more than 2% on a daily basis at $44,750. Ethereum is trading at its highest level since January to at $3,180, rising more than 1% on the day.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.