The Greenback is getting a major lift from higher US yields across the board. US 10-year note yields are up against their 200-day moving average and are up roughly 20 bp from the beginning of the week. The gains in yields on the short-end of the yield curve are nothing short of stunning, considering how low yields were. 3-year notes opened at 0.43% and are now at 0.57%. That’s a 32% rise in the nominal yield!
The US is a lot more attractive place for foreigners to park capital today than it was a week or a month ago.
Mr. Market is signaling, loud and clear, that QE3 is dead.
In EUR/USD, support comes in at 1.3025 while options protection is seen ahead of 1.3000. More buyers are seen at 1.2975 with heavy stops below that level.
