The potential for robust yuan strength against the dollar is becoming murkier. The PBOC’s fixing is appreciating at the fastest pace in more than a year, but state-owned banks’ dollar purchases are acting to cap onshore gains for the Chinese currency.

The squeeze higher for the dollar is wavering Monday after an initial burst set off fresh declines across metals, crude and equity futures. But the steep bounce for the greenback is likely to fade unless there are sustained shifts to undercut the fundamentals that helped drive the US currency down in the latter half of January.

The dollar fell to fresh session lows overnight on comments from President Donald Trump, saying he isn’t concerned about the decline in the greenback. Trump even went as far as to say the dollar is doing great. The Bloomberg Dollar Spot Index is down more than 2.3% this month.

Data suggests that Japanese authorities didn’t intervene during the swoon for USD/JPY which began last Friday. But it is likely that sustaining yen gains will need a follow-up to the Fed’s rate checking.

Two way action from New York Fed and MoF has led to JPY correcting severely to below 155 today. Short term this implies further weakness in JPY as long as the gap between Friday's close and today's open is not filled.

Europe’s pushback against Trump’s Greenland ambitions hardened overnight, and that was enough to accelerate declines for the US dollar and also send Treasury futures lower.