
NZD/USD: US yield advantage keeps pressure on the Kiwi
NZD/USD has become unusually sensitive to relative front-end rates, with the US two-year yield advantage now near historically extreme levels.
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NZD/USD has become unusually sensitive to relative front-end rates, with the US two-year yield advantage now near historically extreme levels.

The Fed delivered a unanimous hike, stronger economic projections and a more hawkish dot plot, giving markets little reason to unwind aggressive tightening bets and keeping the dollar firmly supported.

Fed pricing has turned more hawkish, oil has surged and Treasury yields have backed up hard. Here’s how the pieces fit together.

The usual USD/JPY rates relationship broke down sharply earlier this month, but with speculative shorts flushed out and Japan’s curve re-steepening, the pair heads into the Fed and BOJ with far more two-way risk.

Gold and silver are feeling the full force of surging US yields, but the dollar’s failure to join in may be saving them from an absolute drubbing.

From 1994 and 1999 through to the dollar surge of 2022, history shows Fed tightening has produced very different outcomes for DXY.

Gold’s traditional macro headwinds are firmly back in play, yet the scale of the damage remains limited relative to the size of the rates shock.

A rare surge in US-Japan yield spreads has failed to lift USD/JPY, but with bond yields still rising and the pair printing a bullish engulfing candle, reversal risk is rising.

Today's session has not been particularly favorable for the euro. Recent EUR/USD price action shows a decline of approximately 0.2% in favor of the U.S. dollar, a move largely driven by the release of the U.S. PCE inflation report and the recent recovery seen in the bond market.

The US dollar moved against its recent macro playbook on Monday. AUD/USD paid the price, although bulls still hold the upper hand.

EUR/USD flashes reversal signals after a powerful move higher, just as markets wait for Scott Bessent to provide more detail on how he plans to take pressure off the long end of the US curve.

A $40 trillion debt pile, rising interest costs and a more interventionist Treasury are giving dollar bears something to think about. EUR/USD sits at the centre of that debate.

The US dollar was hammered after Treasury moved to support longer-dated bonds, sending gold and silver sharply higher. It may be premature to declare the debasement trade back, but the embers are glowing.
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