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Gold edges lower toward $2,300 as US yields push higher
The increase in yields, approaching 4.3%, followed hawkish commentary from the Federal Reserve
The USD/JPY pair surged above the 160 mark
The EUR/USD pair continued its downward trend
Treasury yields approaching 4.3%
Gold
On Wednesday, gold prices dipped and traded below $2,310, influenced by rising benchmark 10-year US Treasury bond yields, which approached 4.3% following hawkish commentary from the Federal Reserve. The persistent strength of the US Dollar, supported by strong PMI data, has added pressure on the precious metal.
USD/JPY breaks above the 160
The USD/JPY pair surged above the 160 mark, a level not seen since 1986. This upward momentum has been driven by stronger US economic data, which has bolstered the US Dollar across the forex market. Despite no new significant data releases from Japan or the US today, the yen's weakness has continued due to speculative pressures and the Bank of Japan's dovish stance. The swaps market is currently pricing in a potential 10 basis point rate hike by the BoJ at their July 31 meeting, although this is uncertain given past CPI data.
Market participants have been speculating on the BoJ's possible intervention, especially as leading Japanese financial figures express growing concerns about the yen's depreciation.
EUR/USD extends its decline below 1.0700
The EUR/USD pair continued its downward trend during the session, trading below 1.0700. The persistent strength of the US Dollar, combined with cautious market sentiment, has weighed on the euro. Additional pressure comes from hawkish commentary by the Federal Reserve and ongoing political risks within the European Union.
