In trading yesterday, the dollar was once again the main beneficiary - not by a whole lot though - as Treasury yields also pushed higher. It came after the better-than-expected ISM services report here. And that is keeping with the tone we're seeing since last Friday.
The odds for a September rate hike may still be a measly 7% but the data is helping to reaffirm the narrative that perhaps the Fed can stick to a higher for longer narrative. And that is helping to keep the dollar underpinned again amid higher Treasury yields.
So far today, the overall mood is quieter but all eyes will stay on the bond market once again. Hence, unless we do see more affirmative action in Treasuries, we might be in for a quieter one in Europe as well.
The ranges for the day remain relatively narrow, so we might just get some bit part extensions in the session ahead. USD/JPY remains a hot one to watch as it holds at the highs for the year and eyeing a further push towards 148.00.
In terms of data, we will have the US weekly jobless claims so there is that to be wary about.
