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Dollar recovering its losses on the back of growing US bond yields

On Monday the 11th of September, as geopolitical tensions subsided, investors’ appetite for risk returned. In the European session, the dollar rose against the Japanese yen, Swiss franc, and gold. On the other hand, the US dollar lost ground against the loonie, British pound, and Kiwi dollar. The dollar/yen rate rose to 108.66 and the dollar/franc to 0.9512. Gold, meanwhile, has dropped by 0.77% to 1,336 USD/oz.

During trading in Europe, the euro recovered to 1.2030 and is still above 1.20 at the latest reading. The technical picture favours the bears today. In addition to this, US 10Y bond yields have hit a new daily high in the last hour. This growth in US treasuries is creating pressure on gold.

Since the macroeconomic calendar is empty today, I’m going to stick to this morning’s forecast on the euro/dollar; a drop to 1.1955. If, when the US session gets underway, traders start aggressively shorting the euro, the price could go down as far as 1.1935.

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