USDJPY reacts to a sharp drop in US yields, driven by good sentiment towards the potential passage of the debt limit bill by Congress. Today at 8pm BST, the bill is due to be debated in committee in the House of Representatives.
Of course, the passage of this bill increases the chances of another hike by the Fed, but most likely the last. Data from the US suggests that the economic situation continues to deteriorate. Today, the Dallas regional index fell almost -30 points and the situation is now the worst looking regional index in years (not counting the great financial crisis and covid).
USDJPY falls below the 140 level and the sharp drop in yields suggests that the pair has the potential to fall even to the 136-137 range, where the lower limit of the uptrend channel is located.
Regional indices in the US show further economic problems. Source: Macrobond, Bloomberg, XTB
Source: xStation5
Daily Summary: CPI down, Markets Up
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