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Major currencies subdued ahead of European trading

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A snoozefest basically to start the day

I mean talk about narrow ranges, today in particular seems to be rather restricted.

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Dollar pairs are confined to within 5 pips of each other currently and there hasn’t been any stretching whatsoever among them as we look towards European trading.

The biggest range on the day is 13 pips (USD/JPY, USD/CAD, AUD/USD, and NZD/USD) and that basically says a lot about the state of play and the mood at the moment.

The dollar whiffed after yesterday’s US CPI data as inflation fears cool a little but amid a rebound in yields, the greenback is holding out a little after a sharp fall initially.

This points to dollar gains being capped on the week but any material downside is still tough to come by as taper talk continues to grow. The bond market is the key driver of sentiment at the moment, make no mistake about that.

10-year yields are keeping close to 1.35% on the day and that at least is helping to maintain a calmer mood after the fall to near 1.30% at the lows yesterday.

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