Global Currencies Stabilize, Bitcoin Hits 10 Month High

The US dollar took a breather on Tuesday after its best month-to-date rally against major peers, as a resilient US labour market bolstered the case for a Federal Reserve rate hike next month.

The yen, which is highly sensitive to long-term US bond yields, recovered some of Monday's more than 1% drop, as the 10-year Treasury yield slowed in Tokyo trading after a sharp two-day rise. The Japanese yen was under pressure overnight after the new governor of the Bank of Japan, Kazuo Ueda, pledged to maintain ultra-easy monetary policy for the time being.

Bitcoin, the leading cryptocurrency, briefly reached $30,000 for the first time since June.

The US dollar took a breather on Tuesday after its best month-to-date rally against major peers, as a resilient US labour market bolstered the case for a Federal Reserve rate hike next month.

The yen, which is highly sensitive to long-term US bond yields, recovered some of Monday's more than 1% drop, as the 10-year Treasury yield slowed in Tokyo trading after a sharp two-day rise. The Japanese yen was under pressure overnight after the new governor of the Bank of Japan, Kazuo Ueda, pledged to maintain ultra-easy monetary policy for the time being.

Bitcoin, the leading cryptocurrency, briefly reached $30,000 for the first time since June.

 Ten-year Treasury yields rose to 3.436 percent overnight before settling in Tokyo around 3.41 percent. On Thursday, they fell to a seven-month low of 3.253 percent. On Wednesday, the dollar index fell to a two-month low of 101.40.

"Financial markets have been overly pessimistic about the United States economy since several small U.S. banks failed in March," Commonwealth Bank of Australia strategists Joseph Capurso and Kristina Clifton wrote in a client note, referring to the failures of SVB and Signature Bank.

"Strong underlying CPI is likely to be the catalyst for a change in market pricing for May, and delay pricing for the start of rate cuts," they predicted, predicting that the dollar index would rise to the 100-day moving average of 103.91 this month.

Ten-year Treasury yields rose to 3.436 percent overnight before settling in Tokyo around 3.41 percent. On Thursday, they fell to a seven-month low of 3.253 percent. On Wednesday, the dollar index fell to a two-month low of 101.40.

"Financial markets have been overly pessimistic about the United States economy since several small U.S. banks failed in March," Commonwealth Bank of Australia strategists Joseph Capurso and Kristina Clifton wrote in a client note, referring to the failures of SVB and Signature Bank.

"Strong underlying CPI is likely to be the catalyst for a change in market pricing for May, and delay pricing for the start of rate cuts," they predicted, predicting that the dollar index would rise to the 100-day moving average of 103.91 this month.

"Bitcoin's ceiling remains $30,000, and how it behaves once it trades above it will determine whether the next major bull phase has begun."