EUR/USD, GBP/USD, USD/CAD, USD/JPY – U.S. Dollar Index Remains Stuck Near 105 After PMI Reports

Key Insights

• EUR/USD is trying to settle back below the 1.0600 level. 
• GBP/USD managed to rebound after yesterday’s sell-off. 
• USD/JPY declined below 136.50 as traders took some profits off the table.

U.S. Dollar

U.S. dollar has settled below the 105 level after the release of PMI reports. S&P 500 Global Services PMI increased from 46.8 in January to 50.6 in February, while ISM Non-Manufacturing PMI declined from 55.2 in January to 55.1 in February. Both reports exceeded analyst expectations.

The yield of 10-year Treasuries pulled back towards the 4.00% level as bond traders took some profits off the table after the recent move. This pullback served as a bearish catalyst for the American currency.

EUR/USD

EUR/USD continues its attempts to settle back below the 1.0600 level. Today, traders focused on the final reading of the Euro Area Services PMI report, which indicated that Euro Area Services PMI increased from 50.8 in January to 52.7 in February, compared to analyst consensus of 53.

Most likely, traders will stay focused on the dynamics of Treasury yields as they will have a significant impact on EUR/USD dynamics.

GBP/USD

GBP/USD rebounds after yesterday’s sell-off. The final reading of the UK Services PMI report showed that UK Services PMI increased from 48.7 in January to 53.5 in February. Numbers above 50 show expansion.

The better-than-expected report provided some support to the British pound, although it remains to be seen whether GBP/USD will be able to gain sustainable upside momentum in case Treasury yields continue to move higher.

USD/CAD

USD/CAD moved back above the 1.3600 level despite the rebound in the oil markets. Other commodity-related currencies have shown mixed performance today. AUD/USD climbed towards the 0.6750 level, while NZD/USD pulled back towards 0.6200.

USD/JPY

USD/JPY pulled back below 136.50 as traders continued to take profits near multi-month highs. At this point, it looks that USD/JPY will need additional catalysts to settle above the recent highs at 137.10.

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