The greenback has gradually erased its early advance in European trading and is now pretty much lower across the board. EUR/USD is up 0.3% to 1.0735 and contesting its 100-hour moving average with USD/JPY back down to 140.05 after briefly recovering to 140.65 earlier here.
The pound is the biggest beneficiary though with GBP/USD now back above 1.2400 and even seeing a notable reversal in near-term sentiment:
Over the past few weeks, cable had struggled to break free of its 100 (red line) and 200-hour (blue line) moving averages but is managing just that in European trading today.
The jump is seeing buyers regain near-term control after having neared a test of its 100-day moving average last week. That key level is now seen at 1.2290. Given the turnaround, cable buyers might have room to work with back towards 1.2500 but a lot will depend on dollar sentiment this week.
Treasury yields are looking rather heavy today and that seems to be weighing hard on the dollar, with 10-year yields down 10.5 bps to 3.715% at the moment. Fed rate hike odds continue to sit near 50-50 but the bid in bonds seem to be a bit of an outlier, coming as we see the US debt ceiling deal being reached over the weekend.