Dollar Steady on Month-End and Bearish Option Flows
The dollar was little changed on a trade-weighted basis as month-end flows took the steam out of Asia-session gains.
The Bloomberg Dollar Spot Index swings between gains and losses; the yield on benchmark 10-year bonds rises 2bps to around 4.47%.
While the greenback’s volatility skew keeps shifting higher since May 21, DTCC data show consistent preference for dollar puts versus major peers.
The yen fluctuated after Bank of Japan Governor Kazuo Ueda said the central bank is closely watching the rise in long-bond yields and weak demand at a 40-year auction
USD/JPY down 0.2% at 144.03, versus 143.85-144.77 day range.
Japan’s auction of 40-year government bonds met demand that was the weakest since July.
EUR/USD erases gains to trade slightly higher on the day at 1.1332; sizable bids seen within 1.1250-80: traders.
Inflation expectations of euro-area consumers increased for a second month in April, the ECB said.
NZD/USD leads gains, up 0.4% to 0.5973; Reserve Bank of New Zealand signaled it’s policy rate is into neutral territory after easing policy as expected. The central bank indicated it may make at least one more rate cut.
AUD/USD steadies around 0.6445; Australia’s monthly CPI indicator rose 2.4% from a year ago in April, according to Australia Bureau of Statistics. Median estimate was for 2.3% y/y.
GBP/USD little changeed at 1.3513.
Source: Bloomberg
