The dollar majors have been directionally unambitious with both UK and U.S. markets out for public holidays today. The yuan saw some action, however, falling back after the PBoC fixed the currency at its highest level against the dollar since May 2017. An ex-PBoC official, in an interview with the state-backed Xinhua news agency over the weekend, said that the recent rapid appreciation of the yuan is unsustainable. In data, preliminary May inflation data out of German states came in higher than expected.

The Dollar rose overnight, taking the DXY to two-week highs of 90.44 in early N.Y. The USD showed little reaction to the warmer PCE deflator print, or the generally better trade, Chicago PMI and Michigan sentiment outcomes. After the early round of data, the Greenback faded to near session lows, as profit taking ahead of the long Memorial Day weekend set in. Wall Street was moderately firmer, while yields ended slightly lower on the session. Next week, manufacturing and services ISMs are due, along with the ADP employment survey, and of course, the May BLS employment report on Friday.

The dollar has remained underpinned by a rise in longer-dated Treasury yields, with the 10-year T-note yield lifting to the 1.61-62% area, up about 6-7 bp from the midweek lows. News that U.S. President Biden will present his $6 tln lifted Treasury yields. The DXY USD index remained buoyant, just below yesterday’s eight-day high 90.18. EUR-USD earlier pegged a one-week low at 1.2171 and USD-JPY a six-week high at 109.96. Cable printed a one-week high yesterday at 1.4220 before turning moderately lower.

The dollar has remained underpinned by a rise in longer-dated Treasury yields, with the 10-year T-note yield lifting above 1.62%, up about 7 bp from the midweek lows. News that U.S. President Biden will present his $6 tln (which includes the near $2 tln for pandemic relief, and the $4 tln for a decade long infrastructure and social spending plan) lifted Treasury yields and gave stock markets a boost, despite Biden’s administration indicating that it is aiming to make a capital gains tax increase retroactive to April.

The Dollar firmed up in morning trade, pulled back some, then turned modestly higher at mid-session. Moves were modest, leaving the DXY inside a 90.09 to 89.92 trading range. Incoming data were mixed, seeing a miss in durable orders and pending home sales, while revised GDP was unchanged from the preliminary release, a but light of expectations. Initial jobless claims printed a pandemic low, which was mildly USD supportive. Wall Street posted modest gains on the back of the better claims data, while yields moved higher, also a Greenback positive. Friday’s U.S.

The dollar lifted to a one-week high by the measure of the DXY index, at 90.18, extending the rebound from the four-month low that was seen on Tuesday at 89.54. This comes with 10-year Treasury yields having ticked higher, back towards 1.60% from yesterday’s lows near 1.55%, which were lowest levels since 22 April. Treasuries had perhaps gotten a little too rich, and the dollar a little too suppressed as key inflation data looms up on Friday, when the Fed’s preferred PCE deflator for April will be released.