The U.S. dollar index (DXY) rose by 0.30% to reach a 1.5-week high on July 10, 2023, driven by stronger Treasury note yields, which peaked at 4.43% for the 10-year T-note. This came alongside a 2-week low for the yen, contributing to the dollar’s strength. President Trump indicated a willingness to negotiate tariffs further, which limited dollar gains.
Germany’s May exports fell by 1.4% month-over-month, worse than the expected decline of 0.5%. Meanwhile, imports dropped 3.8%, exceeding the projection of 1.7%, marking the largest decline in a year. The euro (EUR/USD) fell 0.15% to a 1-week low due to these weak trade figures and a stronger dollar, while swaps indicate a 5% chance of a -25 basis point rate cut by the ECB at the July 24 meeting.
The Japanese yen (USD/JPY) decreased by 0.57% against the dollar, reaching a 2-week low amidst concerns over fiscal issues ahead of Japan’s upper house election on July 20. The Japan June eco watchers outlook improved to 45.9, above expectations. Precious metals, including gold and silver, faced pressure from the strengthening dollar and higher global bond yields.
