US Dollar Rebounds on Higher Treasury Yields
The US Dollar strengthened broadly, recovering from recent lows as US Treasury yields resumed their advance and weighed on equities. The Greenback's rebound put pressure on several major currencies, with the Euro fading below the 1.1700 level and the Australian Dollar retreating despite steady domestic manufacturing PMI data. This move higher for the dollar came ahead of the release of global PMI figures.
Gold Price Supported by Treasury Bond Buyback
Gold prices edged higher to around $4,530, finding support after the US Treasury announced an unexpected decision to increase its repurchases of longer-dated bonds. In geopolitical news, the US Treasury Secretary stated that the administration plans to increase economic pressure on Iran, which would likely negate the need for major military operations.
Japanese Yen Weakens Amid Domestic Inflation Data
The Japanese Yen weakened, with the USD/JPY cross climbing back above the 159.00 mark, driven more by US Dollar strength than domestic factors. The Yen's slide also extended against the British Pound, with the GBP/JPY pair reaching a 14-day high. This currency movement occurred as Japan's latest data showed the National Consumer Price Index (CPI) rose 2.0% year-over-year in July, an acceleration from the previous month.
Mixed Performance Across Other G10 Currencies
Several other currencies showed resilience against the broadly stronger US Dollar. The British Pound advanced to its highest level in more than four months, while the New Zealand Dollar held near its best levels since early June. Elsewhere, the Mexican Peso remained firm, supported by a cautious monetary policy stance revealed in the Bank of Mexico's latest meeting minutes.
Sources