Dollar pushes to fresh highs for the year
The greenback is extending gains in European morning trade as the dollar is receiving a fresh impetus from Fed chair Powell's lack of pushback against higher Treasury yields yesterday, with the dollar index trading to fresh highs for the year now.
AUD/USD has slumped to a fresh low since 8 February below 0.7700 as it leads the drop in the major currencies space today. Adding to that is EUR/USD pushing to a fresh low of 1.1915, its lowest level in three months as highlighted here earlier.
USD/JPY is also pushing to fresh highs of 108.49 and closing in on its 100-month moving average @ 108.75.
At this point, the argument of a short squeeze in the dollar is starting to look rather defeated as the greenback is receiving the backing of the Fed to push higher - indirectly.
The Fed chose not to rein in the rise in yields yesterday and that is pushing Treasury real yields higher at a time when other central banks are trying hard to stop that from happening with their respective bond market.
The RBA has stepped up QE purchases, the BOJ has intervened today, and the ECB is working hard with verbal interventions and possibly extending PEPP next week.
The Bloomberg dollar index highlights the technical breakout in the dollar's favour as it moves above its 100-day moving average (red line) for the first time since May last year:
