Dollar steadies as Treasury yields find a footing
DXY traded in a narrow range while EUR and GBP held key technical support. A short note on what we are watching and how we are positioning client FX exposure.
DXY held a 60-pip range over the session, the tightest weekly close in nearly two months. The reprieve owes more to a steadying in 10-year Treasury yields than to anything in the dollar's own narrative — when US duration finds support, the rest of the G10 takes a breath.
EUR/USD held the 1.0820 level we have been watching. Below it, the technical and macro picture turns ambiguous; above it, the path of least resistance remains higher into the next ECB meeting. Cable behaved similarly against 1.2580, with positioning still net-short and therefore vulnerable to a squeeze on any upside surprise from UK services inflation.
We are not trading the dollar directionally for clients here. Where companies and family offices have natural EUR or GBP liabilities, we continue to layer hedges in tranches at pre-agreed levels rather than taking a single all-in view. Conviction is not the same as opportunity, and FX is the asset class where that distinction matters most.
- The pause in the dollar is a yield story, not a dollar story.
- We are layering EUR and GBP hedges in tranches against natural liabilities.
- We avoid taking outright directional FX views on behalf of clients.
