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Talking Points:

- USDOLLAR loses traction near key 10477 level.

- EURUSD laggard, AUDUSD and GBPUSD leaders.

- Forex economic calendar picks up with US consumption data at 12:30 GMT.

The US Dollar has picked up off of its April lows, but despite back-to-back solid Nonfarm Payrolls reports (+282K and +217K), the greenback has failed to gain much traction in the month of June. For what it's worth, the yield environment has started to stabilize; in particular, the belly of the yield curve (3Y-7Y) has started to peak:

US Treasury Yield Curve Change Daily Weekly Monthly Basis Points

While such developments have proven to be USD-positive in the past, the flattening of the US yield curve over the duration of 2014 has proven to be a far bigger hurdle that's yet to have been scaled at this point in time. On a relative basis, now that the ECB has plunged into negative deposit rates, the demand for yield has increased; it's no surprise that the growth-optimistic and speculative-yield plays-du-jour are drawning attention then.

Whereas the EURUSD is under pressure from the ECB's actions and a slightly steeper US yield curve, it's the AUDUSD (speculative-yield) and GBPUSD (growth-optimistic) that are leading the pack. (Suspicion about the ECB's influence can be cross-checked against the CHF, which is also a big loser today.)

The USDOLLAR may be in trouble should today's US Advance Retail Sales (MAY) report disappoints, as the broader index has fallen back to the previously key 10477 support. Given EURUSD's weakness, it's a good indicator for the depth of USDOLLAR distaste: if EURUSD is moving up, the USD is likely in signficant trouble elsewhere, too.

Read more: Don't Let Cable Mislead; Pound Ready for Breakout via GBP/CHF, EUR/GBP

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