Forex Flash: Overnight movements in wake of USD strength – UBS

The USD/JPY continued its advance overnight after finally breaking above 95.00 on Thursday. Rising US yields helped it on its way, and the 10-year US treasury yield now finds itself back above 2.0% for the first time in two weeks. Yield support led to more broad-based dollar strength too: Cable traded back below 1.5000 again despite Thursday's unchanged policy decision from the Bank of England.

In addition, the AUD/USD was heavy too, although it was mainly undermined by a sharp drop in Chinese imports for February. According to Research Analyst Gareth Berry at UBS, “asset markets continue to chalk up new highs, arguably lending credence to concerns from some FOMC policymakers that in seeking to navigate a way out of the current crisis, central bankers are sowing the seeds for a new one.” The Dow Jones Industrial Average hit yet another high, as did JGB futures, and New Zealand equities too. Overnight the Nikkei-225 recovered to levels last seen in September 2008.