Big moves in FX today
Rumors of the demise of the US dollar were wildly exagerrated.
Falling yields hit the US dollar early but it has absolutely rocketed back and USD/JPY is now at the highs of the day. That pair fell to 109.23 but is now trading at 109.57.
There have been roughly 30 pip selloffs in the dollar followed by rebounds at least that large.
The dip in US yields has eased but only slightly. US 10-year yields are down 3.9 bps to 1.49% from a low of 1.47%.
Earlier I was surprised by the falling dollar and yields ahead of the CPI report. Now we might be starting to see the jitters. The consensus on the report is a whopping +4.7% print. Economists are closely bunched around that number but at least one sees 5%, which would be a gut-punch of a headline.