The USDJPY pair has been retreating for the fourth day in a row on Tuesday
The dollar has been on the back foot since the beginning of the week, extending the retreat from fresh highs seen on Friday when the greenback rallied across the board, cheering the upbeat US jobs report. The USD index is now back below the 94.00 figure, having erased post-FOMC gains and tracking downbeat Treasury yields.
The dollar remains on the defensive, lacking safe-haven demand despite a cautious tone in the global financial markets ahead of the key events of the week, including US inflation data and speeches by Lagarde and Powell. Also, the PPI data from the US could set the tone later today.
Of note, the USDJPY pair has been retreating for the fourth day in a row on Tuesday. The pair dipped below the 113.00 figure to register one-month lows around 112.70. adding to the upside pressure surrounding the yen, fresh data showed that Japan’s service sector sentiment index last month rose to its highest level in nearly eight years as new coronavirus cases slid. A cautious tone among investors seems to be helping the safe-haven Japanese currency outperform its rivals.
Meanwhile, EURUSD sees the third day of recovery from yearly lows seen on Friday. The pair found support just above the 1.1500 figure to extend to the 1.1600 area where the 20-DMA lies. On the data front, Germany’s September trade balance came in at 13.2 billion euros versus 13.0 billion euros prior. Exports were seen down 0.7% m/m while imports moved up by 0.1% m/m. In general, trade conditions in Europe’s largest economy have improved considerably since the depths of the pandemic.
