The US dollar opened trading on Tuesday with a choppy start and has demonstrated mixed results in daily trading against other major currencies. Some currency pairs that include`the US dollar have started retracing their bullish trends towards the greenback.
The US dollar has been trading sideways against the euro, the Japanese yen and other currencies this week given the pause in the rising bond yields, which was witnessed in the last months of 2016. The overall market sentiment is almost equally divided between bullish investors and those with a bearish outlook on the greenback.
The US wage data released last weak has also contributed to the negative sentiment towards the greenback as it was below expectations. The US Treasury 2-year and 10-year bond yields have been the main drivers behind the greenback’s bullish rally, but have since stagnated.
The recent CFTC Commitment of traders report indicates that most traders are short on the dollar. The report also indicates that the markets have priced-in the bullishness triggered by Donald Trump‘s election and the FOMC’s hawkishness.
Investors are waiting for President-elect Donald Trump’s first speech on Wednesday as he might shed some light on the monetary policies to be pursued by his administration. Investors are also looking forward to Thursday’s speeches by five Fed speakers for further direction on fiscal policies.
The EUR/USD currency pair was trading at 1.0558 as at 17:50 GMT having opened trading at 1.0589. The USD/JPY was trading at 115.84 having tested lows of 115.15 earlier in the day.
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