- USD / JPY is higher despite widespread weakness in the USD on Tuesday.
- The yield on 10-year US Treasuries is up more than 4%.
- The US dollar index continues to decline, remains below 93.00.
USD / JPY extended its daily lead and hit a new weekly high of 106.50 on Tuesday. At the time of writing, the pair was up 0.35% on a daily basis to 106.34.
Risk rally raises USD / JPY on Tuesday
Although the USD continues to weaken against the majority of its main rivals, the USD / JPY maintains its bullish momentum as the risk environment does not allow the safe haven JPY to find demand. After closing the first day of the week in positive territory, the US Dollar Index (DXY) turned south on Tuesday and was last seen losing 0.33% on the day to 92.98.
The easing of US-China tensions following the optimistic tone of the latest round of trade talks and optimism for an effective coronavirus treatment allows risk flows to dominate markets. Reflecting the positive market environment, the 10-year US Treasury yield is up more than 4% on the day and the S&P 500 remains on track to open to a new all-time high.
Later in the session, the Conference Board’s Consumer Confidence Index and new home sales data in the United States will be examined for further momentum. Earlier today, US data showed that the June housing price index rose 0.9% on a monthly basis, but was largely ignored by market participants.