Ella 
AUD/USD and NZD/USD led the gains, helped by a weaker US dollar and lower Treasury yields. The Australian dollar climbed to 0.6553 (0.6530) and the New Zealand dollar climbed from 0.6140 to 0.6167.
Yesterday, the People’s Bank of China kept the 1-year prime lending rate unchanged at 3.45%. However, the People’s Bank of China cut the five-year prime lending rate to 3.95% from 4.20%, beating analysts’ expectations for a cut to 4.10%.
This is the first interest rate cut since June 2023. Chinese policymakers are seen taking decisive steps to boost the real estate sector at a time of economic challenges.
The U.S. dollar index (DXY), which measures the dollar’s value against a basket of six major currencies, was flat at 104.27. There was little momentum moving FX markets ahead of the release of FOMC minutes and speeches from several Fed officials.
Every yield tells a story. The U.S. 10-year Treasury yield fell 2 basis points to 4.26%. The two-year U.S. Treasury yield closed at 4.60% (versus 4.64% yesterday). Treasury rates were lower elsewhere around the world.
USD/JPY fell to 149.97 from 150.13 previously, hurt by lower U.S. bond yields. Japan’s 10-year JGB rate was flat at 0.72%.
GBP/USD rose from 1.2597 to 1.2620. Sterling surged to an overnight high of 1.2669 after Bank of England Governor Andrew Bailey said the UK economy may be doing better than expected.
EUR/USD rises to 1.0808 (1.0780). The euro surged to an overnight high of 1.0839 after the euro zone’s current account surplus climbed to 31.9 billion euros from 31.7 billion euros previously.
The U.S. dollar edged lower against Asian and emerging market currencies (EMFX). USD/CNH fell to 7.2025 from 7.2110. USD/SGD fell to 1.3437 from 1.3460.
Global stock markets ended slightly lower. The Dow Jones (DOW) was last at 38,590 (38,620) and the S&P 500 (S&P 500) was at 4,977 from 5,010 yesterday. Germany’s DAX closed at 17,070 points (17,090 points).
AUD/USD climbed to an overnight high of 0.6579 and closed at 0.6527 yesterday. In choppy trading, the Australian dollar closed at 0.6550. The Australian dollar strengthened and ended higher against other currencies.
NZD/USD (aka the “flightless bird”) took flight, surging to an overnight high of 0.6191 before falling back to 0.6165 (from 0.6150 yesterday). New Zealand’s global dairy trade index rose to 0.5%, above expectations of -1%.
EUR/USD – rebounded to 1.0808 from 1.0780 yesterday. This was the euro’s highest closing price in nearly three weeks. The euro was boosted by a higher-than-expected euro zone current account surplus and broad dollar weakness.
USD/JPY – USD/JPY fell to 149.97 from 150.13 yesterday. Falling U.S. Treasury yields weighed on the pair. In contrast, Japan’s 10-year government bond yield was flat at 0.72%. The overnight low was 149.68.
