It’s been more or less a straightforward one so far in European morning trade, with traders sticking with the sell the dollar, buy everything else mood. The more dovish Fed yesterday is the main driver still, all before we get a more of a mix of the BOE and ECB later on. The dollar’s struggles come as Treasury yields are also falling further, with 10-year yields now hitting below 3.95% on the day:

The USD/JPY chart above shows a further technical breakdown in the pair, falling past its 200-day moving average (blue line) now and that tees up a potential drop towards 140.00 next.

A more dovish BOE and ECB could be further catalysts to drive further gains in the Japanese yen, à la lower bond yields globally.

Going back to the dollar, EUR/USD is seen up 0.5% to 1.0925 currently and GBP/USD up 0.4% to 1.2675 on the day. As equities are also ripping higher in European trading, commodity currencies are also benefiting with AUD/USD up 0.9% to 0.6715 and NZD/USD up 0.7% to 0.6215 currently.

This article was written by Justin Low at www.forexlive.com.