The US Dollar strengthened during the European trading session, driven by rising yields and hawkish commentary from Federal Reserve officials. According to FX Street (MUFG), US fixed income sell-offs pushed global bond prices lower, lifting yields across the curve and supporting the dollar's advance. The EUR/USD pair edged down from around 1.1400 to near 1.1380 following hawkish remarks from Fed Bank of New York President John Williams, who noted easing downside employment risks and robust demand fueled by AI.
Meanwhile, the Brazilian Real weakened slightly to BRL 5.1462 per USD after the Central Bank of Brazil’s Copom cut the Selic rate to 13.75%, as reported by FX Street (Rabobank). Despite this dip, the Real outperformed most emerging market peers. Equity futures also retreated during European hours, with Dow Jones futures falling 0.17% to 51,780, S&P 500 futures down 0.34% to 7,750, and Nasdaq 100 futures slipping 0.5% to 30,610 amid expectations of further Fed rate hikes.
Japan’s markets remain attentive to Fed policy developments, as a stronger dollar and rising US yields could impact export competitiveness and influence Bank of Japan policy considerations.