The jump in Treasury yields | 29 December 2022

29 December 2022, EUR/USD

EURUSD trading plan:

The dollar indexes a one-week high, boosted by a jump in Treasury yields and investor expectations for a rebound in Chinese growth as COVID-19 curbs loosen. Investors have been carefully assessing China's move to reopen its COVID-battered economy against the backdrop of a surge in infections. While recent data pointing to an easing in inflationary pressures has bolstered hopes of smaller Fed rate hikes, a tight labor market and a resilient American economy have spurred worries that rates could stay higher for longer. Traders are now pricing in 69% odds of a 25-basis point rate hike at the U.S. central bank's February meeting and see rates peaking at 4.94% in the first half of next year.

Investment idea: range 1.0575 - 1.0655.

David Johnson
Analyst of «FreshForex» company
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