Dollar opens mixed as yen softens, euro steadies; yield curve steepens, stocks tick higher
The dollar began the New York session unevenly, stronger against the yen but slipping versus the euro and little changed against sterling, as a steeper U.S. Treasury curve and a modest equity rebound set the tone for FX risk.
FX snapshot and rates
The greenback gained 0.34% against the yen, was down 0.06% versus the euro, and up 0.03% against the pound in early trade. The move dovetails with a slight steepening in U.S. rates: the 2-year yield eased to 3.538% (-0.2 bps) while the 10-year firmed to 4.113% (+1.8 bps) and the 30-year to 4.762% (+2.0 bps). A steeper curve typically supports USD/JPY via wider rate differentials, while the euro found a small bid after firmer euro-area inflation prints.
Equities and commodities
- U.S. stocks advanced after ending a five-day winning streak on Monday: Dow +53, S&P 500 +15, Nasdaq +94.9.
- Crude oil slipped $0.16 to $59.16, underscoring ongoing growth and supply concerns.
- Gold fell $21.52 (-0.5%) to $4,208.93; silver dropped $0.54 (-0.94%) to $57.40 after setting a record $58.84 yesterday.
- Bitcoin rebounded about $1,000 to trade near $87,258, up from yesterday’s low of $83,814.
Euro data: inflation tops forecast, jobless up slightly
Euro-area flash HICP rose 2.2% y/y (vs 2.1% expected), while core inflation (ex food, energy, alcohol, tobacco) held at 2.4% as forecast. The euro’s resilience against the dollar reflects the marginal upside surprise, even as the EU unemployment rate ticked up to 6.4% (vs 6.3% expected), tempering growth optimism. For traders, the mix argues for range-bound EUR/USD near-term, with inflation risk supporting dips and growth risk capping rallies.
Asia trade watch: rare earths signal
China has reportedly issued the first rare earth magnet general export license to the U.S. since the Xi–Trump meeting. While details are limited, any incremental easing in critical materials flows could calm supply-chain anxiety and weigh on defensive metals—an angle commodity and FX desks will watch for spillovers into cyclicals and the yuan complex.
What it means for the Big 3
- USD/JPY: Supported by higher long-end U.S. yields and a steeper curve; dips likely tied to risk wobbles or yen-buying on cross flows.
- EUR/USD: Slightly bid after HICP beat; growth concerns (higher unemployment) argue for two-way trade until fresh data shifts the macro balance.
- GBP/USD: Flat to slightly softer; sterling remains sensitive to global risk appetite and the U.S. rates path amid a quiet UK data backdrop.
Key points
- Dollar mixed: up vs JPY (+0.34%), down vs EUR (-0.06%), little changed vs GBP (+0.03%).
- U.S. curve steepens: 2y 3.538% (-0.2 bps), 10y 4.113% (+1.8 bps), 30y 4.762% (+2.0 bps).
- Stocks edge higher: Dow +53, S&P +15, Nasdaq +94.9.
- Commodities softer: crude $59.16, gold $4,208.93 (-$21.52), silver $57.40 after a record high Monday.
- Bitcoin rebounds to ~$87,258 from yesterday’s $83,814 low.
- Euro-area flash HICP 2.2% y/y vs 2.1% expected; EU jobless rate 6.4% vs 6.3% forecast.
- China reportedly grants first rare earth magnet general export license to the U.S. since Xi–Trump meeting.
FAQ
Why is the dollar mixed today?
Rates and data are pulling the dollar in different directions: a steeper U.S. yield curve supports USD/JPY, while a mild upside surprise in euro-area inflation underpins EUR/USD. Sterling is little moved amid sparse UK catalysts and broader risk-on equity tone.
How do the latest U.S. yield moves affect FX?
A steeper curve—front-end yields down, long-end up—typically favors carry and supports USD/JPY. For EUR/USD and GBP/USD, the long-end move matters for risk appetite, but the front-end (rate expectations) remains the bigger driver over time.
What did euro-area data signal for the ECB and the euro?
Flash HICP at 2.2% y/y is a touch hot, keeping disinflation on track but not accelerating. With unemployment at 6.4%, the growth backdrop is mixed. The euro gains modest support on the inflation beat, but the path for ECB easing still hinges on incoming activity and wage data.
Why are gold and silver lower?
Precious metals eased alongside a firmer dollar in parts of the complex and higher long-end U.S. yields, which raise the opportunity cost of holding non-yielding assets. Silver also retraced after hitting a record high yesterday.
What’s the significance of China’s rare earth export license headline?
If confirmed, it could signal incremental easing in critical materials trade, potentially calming supply-chain risks. That can filter into industrial metals, selected equities, and related FX pairs by improving sentiment toward cyclical exposure.
This market brief is produced in the editorial style of BPayNews.
