Ella 
The U.S. Dollar Index (DXY), which measures the dollar’s value against a basket of six major currencies, has started 2024 on a high, rebounding 0.81% from its 2023 close.
Bets that global interest rates will fall back have been reduced, while bond yields have soared. The 10-year U.S. bond rate climbed to 3.94% (3.88%). The two-year U.S. bond yield jumped 8 basis points to 4.33%.
Other global interest rates also rose, but less than in the United States. German 10-year bund yields rose 4 basis points to 2.06%. UK 10-year gilt yields ended at 3.63%, up from 3.53% previously.
The New Zealand dollar was the biggest loser, falling 1% against the US dollar from 0.6320 to 0.6150. EUR/USD fell 0.8%, falling from 1.1035 to 1.0947. AUD/USD fell 0.7% to 0.6762.
USD/JPY surged to 142.00 (141.05) in light market conditions. The Japanese market remains closed today and is still in the midst of a four-day holiday. The recent 7.6-magnitude earthquake left thousands homeless but has so far had little impact on the yen.
GBP/USD fell from 1.2735 to 1.2625 amid broad dollar strength. The UK manufacturing purchasing managers’ index fell to 46.2 in December from the previous value of 47.2.
The dollar was broadly higher against Asian and emerging market currencies. USD/CNH rose 0.53% from 7.1250 to 7.1550, and USD/SGD climbed from 1.3197 to 1.3267.
Rising U.S. Treasury yields sent U.S. stocks lower. The Dow Jones Industrial Average fell from 37,705 points to 37,625 points. The S&P 500 index fell 0.96%, falling from 4770 points to 4730 points. Australia’s ASX200 index fell 0.3% to 7580 points.
Recently released economic data showed China’s Caixin Manufacturing Purchasing Managers’ Index rose to 50.8 from 50.7, above the median forecast of 50.4. The final U.S. manufacturing PMI fell to 47.9 in December from 48.2.
EUR/USD – The currency fell from 1.1035 to 1.0947 against the US dollar. In thin market conditions, the lowest price traded overnight was 1.0941, while the highest price overnight was recorded at 1.1044.
AUD/USD – AUD/USD was lower, settling at 0.6763, down from 0.6830. Australia’s Nippon Bank manufacturing PMI fell to 47.6 from 47.7 previously, missing expectations of 47.8. AUD/USD traded as high as 0.6839 overnight.
GBP/USD – GBP/USD was lower at 1.2625, down 0.8% from 1.2735 previously. In choppy trading, the pound rebounded to an overnight high of 1.2760, while the overnight low was recorded at 1.0941.
USD/JPY – USD/JPY rose to 142.00 from 141.05 previously in thin but volatile trade. USD/JPY hit an overnight high of 142.22 and an overnight low of 141.10. The country is still assessing the impact of a powerful earthquake that struck on New Year’s Day.
