USD edges higher, stocks rise on Micron earnings, yields climb
The US dollar is modestly higher in early North American trade, while stock futures rally on strong Micron earnings and bond yields edge up ahead of key PCE data.
The US dollar is trading modestly higher to start the North American session, with the USDJPY testing multi-decade highs near 161.95. The pair reached 161.94, just shy of that level, and currently sits at 161.88. Meanwhile, the EURUSD and GBPUSD both threatened to push higher toward their falling 100-hour moving averages but reversed lower, reflecting a stronger dollar.
Stock futures are rallying in pre-market trading, driven by a blowout earnings report from Micron Technology. Micron shares surged over 17% in pre-market, lifting other chip stocks and boosting overall market sentiment. The move comes as the company blasted through expectations, providing a tailwind for equities. However, the dollar's strength suggests that risk appetite is not fully translating into broad-based selling of the greenback, as traders also focus on the upcoming economic data.
The economic calendar is packed today, with the release of the PCE price index at 8:30 AM ET. This data is closely watched by the Federal Reserve and could influence expectations for interest rate policy. If the PCE reading comes in hot, it could reinforce the hawkish stance of the Fed, potentially pushing yields and the dollar higher. Conversely, a softer reading might ease some pressure. Bond yields are already edging up modestly ahead of the release, with the 10-year Treasury yield climbing a few basis points. For forex traders, the interplay between yields, equity sentiment, and the dollar will be key. NowPrice offers real-time FX quotes to track these moves as they happen.
Looking ahead, the focus will remain on the PCE data and any subsequent commentary from Fed officials. The USDJPY's test of multi-decade highs is a critical level to watch; a break above 161.95 could open the door for further yen weakness, potentially triggering intervention concerns. Meanwhile, the EURUSD and GBPUSD will need to reclaim their 100-hour MAs to regain bullish momentum. Traders should also monitor any spillover effects from Micron's earnings into broader tech and risk sentiment, which could influence currency pairs like USDJPY and EURUSD.