Market wrap: Dollar drops on Trump - Westpac

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The US dollar fell after a Trump adviser warned the euro was undervalued. Lower bond yields also contributed, some US data disappointing. Equities continued to retreat, the S&P500 down 0.5%.

Interest rates: US 10yr treasury yields fell from 2.50% to 2.43% and 2yr yields fell from 1.21% to 1.18%. Fed fund futures pricing slipped a little, fully pricing the next rate hikes in June and December. The bulk of the move occurred after the disappointing Chicago PMI data.

Currencies:  The US dollar index shed another 0.8% yesterday, trading at a two-month low. EUR performed well following Trump adviser Navarro’s comments, rising from 1.0685 to 1.0812 (two-month high). USD/JPY was fairly stable after the BoJ announcement, but fell later during the USD selloff from 114.00 to 112.08 (two-month low). AUD rose from 0.7542 to 0.7606. NZD rose from 0.7271 to 0.7350 – a three month high. AUD/NZD extended its multi-week slide from 1.0380 to 1.0331 – a four-month low."