Modest bounce after yesterday's breakdown
The US dollar is treading water in choppy trading but it's beginning to feel the weight of the bond market.
The driver in markets at the moment is the bond market where German 10s are up to 0.92% from 0.07% just over a month ago. That's put a squeeze on the dollar but sovereign bonds were quieter today until the past few minutes as German bunds sold off again, pushing yields up 7 bps to 0.95%.
That's given a chance for the US dollar to make some headway, save for against the loonie, which is being underpinned by an oil rally. At the moment, the dollar bounce isn't particularly inspiring. EUR/USD is down a half-cent after rising 175 pips yesterday but it's beginning to get some life.
