Global Selloff: U.S. Dollar Benefits From Yield Rise
And the selloff began. Global bonds experienced an aggressive selloff Thursday that drove steep losses in Treasuries and U.S. stocks. The benchmark Treasury yield spiked to a one-year high and the U.S. dollar in turn benefited from rising yields. Also, the British pound which was already extremely overbought experienced a sharp selloff, succumbing to the dollar’s rise.
Unlike the strong correction seen in GBP/USD which fell below 1.40, the EUR/USD refrained from a steep decline, still holding above 1.21. If the euro falls below 1.2090 it may extend the decline towards 1.2060 and 1.20.
In the GBP/USD we now see a support at 1.38.
The DAX fell victim to Thursday’s selloff and slid below 13800 towards 13680. A next lower target is now seen at 13600 followed by 13400. Buyers in the DAX will need to wait for another breakout above 13800 in order to expect a higher target at 14000.
We wish you good trades for the last trading day in February and a peaceful weekend!
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