Will the currency market turn bearish as bond buying accelerates?

Will the currency market turn bearish as bond buying accelerates?

20.07.2021

Yesterday, stock prices fell in the U.S. market, creating a risk-off sentiment characterized by falling stock prices, lower oil prices, and declining interest rates. With the Delta variant of the coronavirus spreading, funds have flowed from the stock market into the bond market, and WTI crude oil has dropped to $66.00. The Russell 2000 has fallen to 2,100, the lower boundary of its daily trading range, and investors need to be on guard against a break below this level.

The yield on the 10-year U.S. Treasury note has fallen to the 1.19% range, and the USD/JPY pair has dropped by about 100 pips from 110.09 to 109.06.Technically, the pair has broken below the daily trend line, and with no clear support until the next support level at 108.73, we should be wary of further declines. However, the AUD/USD pair, which is showing further weakness, has fallen for four consecutive days and is currently trading around 0.731.

Today, the German Producer Price Index and Swiss Trade Balance are scheduled for release at 3:00 PM Asia time, followed by the Canadian Housing Price Index, U.S. Housing Starts, and U.S. Building Permits at 9:30 PM U.S. time. As we monitor currency strength and weakness, we intend to remain cautious and wait and see whether the recent decline in financial markets has peaked.

Past Market Reports

1. 20.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

2. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

3. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

4. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

5. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

6. 13.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

7. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

8. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

9. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

10. 07.04.2026

    Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran