U.S. 10-year Treasury yields have declined for the eighth consecutive session, currently hovering around 3.60%. Similarly, the two-year yield has dropped 35 basis points since the end of last month, settling at approximately 3.55%. This downward trend in U.S. interest rates has exerted pressure on the dollar, which is trading lower against most major global currencies. Additionally, comments from a Bank of Japan official reaffirming the commitment to continue normalizing monetary policy have provided further support for the yen. The dollar has tested its early August low near JPY140.70.
Despite disappointing July GDP data from the U.K., the British pound has managed to edge slightly higher, though it lags behind other currencies.
Meanwhile, lower U.S. yields and a weaker dollar may be contributing to a rally in gold prices, marking the third consecutive day of gains, with gold reaching nearly $2529 today. October WTI crude oil prices have stabilized after hitting a new low near $65 yesterday.

Asia-Pacific Markets
The ongoing decline in U.S. yields, including a nearly six-basis point drop in the 10-year yield yesterday followed by another three basis points today, has pushed the greenback lower against the Japanese yen. After trading within Monday’s range, the dollar settled at its lows yesterday, and earlier today it was down 1.2%, testing the spike low from early August near JPY141.70.
The Australian dollar, while exhibiting a firmer tone, remains within yesterday’s trading range. To signal a more significant move, it would need to break above yesterday’s high of $0.6675.

European Markets
The U.K. economy showed no growth in July for the second straight month, yet sterling, along with the euro, managed to inch slightly higher than yesterday’s high. Despite this, the overall tone of both currencies appears to be consolidative. A break above $1.3125-$1.3145 could signal a stronger outlook for sterling.
The euro, which recently hit a marginal new low (~$1.1015) after reaching a year-high in late August above $1.12, has since rebounded to trade slightly above $1.1050, just above yesterday's high by a slim margin.

American Markets
Looking ahead, market participants are focused on the release of August CPI data, with Bloomberg’s survey suggesting a 0.2% increase in both headline and core inflation. Such a result would bring the year-over-year headline inflation rate down to 2.6%, while core inflation is expected to remain steady at 3.2%. At the recent Jackson Hole symposium, Federal Reserve Chair Jerome Powell emphasized that the Fed’s focus on its full employment mandate has grown stronger, given its increased confidence in reaching the 2% inflation target. As a result, unless the CPI data delivers a significant surprise, it is unlikely to alter expectations for the Federal Open Market Committee (FOMC) meeting next week.