The US dollar didn't stay down for long.
USD/JPY is a good illustration of the rollercoaster in the forex market today as it sank in rapid fashion just ahead of 10 am in New York only to pull a U-turn and a rip to the highs of the day.
What's been tough for traders is that none of these moves came on any kind of fundamental news. The lone US release today was trade balance and it was close to estimates.
The Bank of Canada hike may have led market participants to price in a higher chance of a hike from the Fed but -- by the same token -- the BOC and RBA hiking this week will be disinflationary for global pricing and that should make it easier for the Fed to stand pat.
Fixed income could be a driver though with global yields rising, including in the US where 10-year yields are up 6.8 bps to a session high of 3.76% at the moment.
