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Dollar weakens as US long yields fall, traders eye USD/JPY and USD/CAD

The 30-year Treasury yield fell about 9 bps to 5.19%, while markets await US data including the Philadelphia Fed Manufacturing Index and initial jobless claims.

Reported · Written up by our desk · Major Pairs

The US dollar is under moderate pressure as long-term Treasury yields have declined, with the 30-year yield down about 9 basis points to 5.19%. Action Forex also points to Treasury buybacks, with the US Treasury Department increasing repurchases for 10- to 30-year maturities to support market liquidity.

The yield slide has weakened a key support for the dollar and has been particularly relevant for USD/JPY, a pair sensitive to bond-market moves. The decline comes alongside the latest FOMC minutes, which showed policymakers increasingly concerned about inflation risks and some officials favoring a rate hike as early as the July meeting, keeping the tone relatively hawkish.

Looking ahead, traders are set to focus on fresh US economic data, including the Philadelphia Fed Manufacturing Index expected to fall to 24.1 from 41.4, and initial jobless claims forecast at 210,000. Weaker-than-expected figures could add pressure to the dollar, while resilient data may help it recover some recent losses.

For Canada, commodity-related data is expected to offer another driver for USD/CAD, with the Raw Materials Price Index (RMPI) projected to decline 1.8% after a 6.9% drop the prior month. Action Forex notes USD/JPY has retreated from attempts near 160.00 toward 158.00 as yields eased, while USD/CAD remains in a broader downtrend around the 1.3800 support level.

Latest closeUSD/JPY 159.31 ▼0.1%

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