Dollar under pressure
The US dollar maintained a strong and steady supply yesterday for no particular reason. Today he woke up on the other side of the bed and he is sold hard.
The momentum for the rise in US stocks and the fall in the US dollar is well established, but it disconnected yesterday. This was not going to continue and with US equity futures on the rise again, with European stocks the dollar is cracking.
The main beneficiary at the moment is cable, up 100 pips off the low of the session at 1.3166.
I think there is more to this catch-up trade more broadly, but keep an eye out for Treasury yields. They are higher in a dip today and we have a 2 year auction at 17:00 GMT. 10-year yields are up 4.7bp to 0.70% and the August high of 0.726% is resistance. Breaking this could trigger the purchase of dollars.