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The dollar is keeping somewhat steadier today but it is still all about yields and the bond market at this stage, with there being a ceiling established for 10-year Treasury yields at 1.75%. But there is also a soft bottom at around 1.60% to consider.
Barring a major correction, the dollar may still find some support along the way as long as yields keep somewhat elevated.
A lot will also depend on economic data moving forward and we've already come to see that it is a tall order to generate the next leg higher in yields.
The latest pullback sees a correction in some yen and franc pairs as well, noticeably against the Canadian dollar. That might be a good spot to watch for dip buying considering the loonie's fundamentals remain relatively solid in the big picture.
A push back towards the 23-24 March lows near 86.00 may present a good look for buyers to step back in for CAD/JPY, subject to conditions in the oil market as well.
Elsewhere, EUR/GBP posted its strongest daily performance for the year yesterday as it comes up for air but buyers need to break 0.8640-45 to convince on a further extension in the corrective move.
US equities look to be pausing for direction after the record push on Monday and will look towards the FOMC meeting minutes today for further clues.
However, if the move higher in yields has stalled, that may perhaps keep tech stocks happy considering the Goldilocks situation i.e. US economy bouncing, higher yields move stalling, Fed continuing to keep the printing press on overdrive.
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