US dollar sell-off unconvincingly resumes

US dollar retreat resumes

US yields eased lower again overnight, notably at the front end of the curve where the 5-year hit record lows. That in turn fed through to currency markets, where the US dollar sell-off resumed after the briefest of breaks. Again, it was most noticeable vis the major currencies, with EUR, GBP, CHF and the commodity group all recording modest gains of around 0.50%.

The dollar index eased 0.30% to 93.26, leaving it parked in the middle of the past week’s trading range. EUR/USD has recaptured 1.1800, with GBP/USD rising to 1.3100 again. Again though, the gains versus the dollar were unremarkable, suggesting that price action remains consolidative rather than trending. In the US this evening, ADP Employment and ISM Non-Manufacturing PMI. Both will be closely monitored, the ADP for clues as to the outcome of Friday’s Non-Farm Payrolls. The Non-Farm Payrolls could provide a fresh direction regarding the US dollar.

Many of the majors are tracing out what appears to be topping patterns on the charts. Notably, EUR/USD, AUD/USD and NZD/USD. That could be hinting that the US dollar correction still has more to run before the downtrend resumes again in earnest.

The picture is less clear among Asian currencies. Having lagged the initial US dollar sell-off, most regional currencies have continued to outperform this week. THB, MYR and SGD have all continued to gain versus the greenback, likely boosted by improving PMI data across the world on Monday.

Notably, the Chinese yuan has hit 5-month highs, with USD/CNY and USD/CNH falling to around 6.9550 today. China data has most certainly played a part, as have inflows to a buoyant stock market. Having broken 6.9650, USD/CNY seems poised to strengthen further, possibly as far as 6.9200 in the coming week. Only a strong comeback by the US dollar versus the major currencies calls that premise into doubt, with its knock-on effects on the CNY basket.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

Latest posts by Jeffrey Halley (see all)