Forex Today: Dollar in a win-win scenario

What you need to take care of on Tuesday, April 12:

The market mood was sour at the beginning of the week, with the greenback initially falling but later recovering against its major rivals. Demand for safety pushed USD/CHF lower, to the 0.9300 region, and gold higher, as the bright metal trades around $1,950 a troy ounce.

However, soaring US government bond yields helped USD/JPY to reach a fresh multi-year high of 125.76, currently trading a handful of pips below the latter. Yields soared amid concerns related to skyrocketing inflation and the US Federal Reserve’s aggressive response to it. Recession sounds out loud, although there’s no particular sign that confirms such a downturn.  The yield of the 10-year Treasury note peaked at 2.793%, while that on the 2-year note hit 2.594%.

Commodity-linked currencies were the worst performers, with AUD/USD down to the 0.7410 price zone and USD/CAD up to 1.2636.

The EUR/USD pair and GBP/USD ended the day little changed, at 1.0880 and 1.3020 respectively.

Chinese inflation rose in March, while the large lockdowns in the country exacerbate supply-chain issues, alongside the Eastern European crisis.

Meanwhile, US policymakers continued to pave the way towards a 50 bps rate hike in the May meeting. Central bankers from around the world are adopting more aggressive tightening stances, further weighing on the market’s mood.

Global indexes closed in the red, with Wall Street posting substantial losses, reflecting the dismal market mood. Asian indexes are poised to follow the lead, which may see the dollar appreciating further.

The US will publish March inflation figures on Tuesday, and the White House anticipated it would be “elevated.”

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