USD/JPY comes under pressure
The US dollar fell against the yen and euro after poor data raised new questions about the strength of the economy.
The market came into the year worried about a recession but that later morphed into worries about foreign economies and optimism about domestic growth. The Fed wants to wait and see how the mixed numbers resolve.
Today's slate of data certainly won't provide any clarity. Initial jobless claims were upbeat, falling to 216K from 239K but other data was soft. Capital goods orders non-defense ex-aircraft -- a proxy for business investment -- fell 0.7% in December compared to +0.2% expected. The November reading was also revised lower. The Philly Fed plunged to -4.1 from +17.0. It's the first time in negative territory since May 2016.
The response in the FX market was modest US dollar selling. USD/JPY fell to a session low of 110.57 from 110.72 before the numbers. The euro rose to 1.1365 from 1.1350. However both moves were pared after the kneejerk.
At the same time, the US dollar is getting some support from rising Treasury yields. The 10-year note is up 3.6 bps to 2.68%.
