The dollar decided to make a move yesterday as it jumped higher against the rest of the major currencies, with USD/JPY pulling up to its highest in three weeks with a firm break above 135.00. That move is being extended today as price now climbs to 136.58, backed by a jump higher in Treasury yields as well.
From a technical perspective, it looks to be a clean break with buyers looking to target a move back towards the July high at 139.39 but also setting sights on the 140.00 mark.
There are growing concerns that inflation hasn't quite peaked yet and with Fed speakers continuing to be resolute in their resolve to do battle against that situation, talks of a Fed pivot from last month may have been a little premature.
I mean we definitely are in the second-half of the tightening cycle by major central banks but as mentioned before:
"The fact that it (core inflation) sits near 6% means the Fed is still a long way from delivering on its mandate. In short, it is too soon to be calling this a turning point or a confirmation that a Fed pivot will be coming soon. If anything else, this is just first base. We're going to have to wait until the bases are loaded by getting confirmation from the data in the months ahead before angling for that home run."
