Rising yields are not necessarily going to support the USD moving forward – Scotiabank

The USD jumped on Thursday as US yields rose strongly. Economists at Scotiabank analyze Greenack’s outlook.

Trends may steady ahead of next week’s key data

Rising yields which reflect rising risks for holding US Treasury debt rather than the underlying strength of US economic data are not necessarily going to support the USD moving forward.

The squeeze higher in the DXY averted rising technical pressure for more losses below support in the mid-105 area and gains appear to be stalling, if not reversing from 106. 

There is still some underlying softness evident in the broader USD performance but trends may steady ahead of next week’s key (CPI, Retail Sales) data.