Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
2023 10 18T031017Z 1 LYNXMPEJ9H03V RTROPTP 4 BUSINESS CURRENCY - Business Express
A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration

Dollar dips as 10-year yields back away from highs


Dollar dips as 10-year yields back away from highs

By Karen Brettell

NEW YORK (Reuters) – The dollar fell against the euro and yen Thursday as the U.S. 10-year yield backed away from the 5% level it neared, before remarks by Federal Reserve Chair Jerome Powell at a discussion on the economy.

Higher Treasury yields have increased the relative attractiveness of the U.S. currency since mid-July, with benchmark 10-year yields earlier on Thursday hitting a 16-year high of 4.983%.

But the rally in the greenback has largely stalled and the currency has consolidated since the index hit a 10-month high on Oct. 3.

“The focus has been on the Treasuries … and most of the focus and the volatility has been in longer-term yield, which tend to have less of a direct impact on FX markets than the front-end yields typically,” said Vassili Serebriakov, an FX strategist at UBS in New York.

“It’s to some extent the question of are long-term yields rising because of the stronger growth outlook in the U.S., or is there also an element of supply impact and concerns over longer-term fiscal policy?” he added. “I think that’s maybe why the impact on FX is a little bit less straightforward.”

The rally in the greenback is also seen as stretched, with the index having risen by 6.8% since mid-July.

“Dollar longs are already quite significant and maybe preventing the dollar from rallying further at this point,” Serebriakov said.

The comments by Powell on Thursday will be watched for any new clues on U.S. interest rate policy. The Fed is expected to hold rates higher for longer as it battles inflation that continues to run above its 2% annual target and it may also raise them again depending on how the economy fares in the coming months.

Fed funds futures traders are pricing in a 39% probability the Fed will raise rates again by December, but see only a 6% chance of a hike in November, according to the CME Group’s FedWatch Tool.

The dollar index was last down 0.24% on the day at 106.28.

Concerns over the conflict between Hamas and Israel is also a factor that may increase safe haven demand for the U.S. currency.

The euro gained 0.37% to $1.0577.

Risk sensitive currencies including the Australian and New Zealand dollars were among the worst performers on Thursday.

The Aussie fell 0.21% to $0.6323 while the kiwi dropped 0.29% to $0.5838. The New Zealand currency earlier fell to $0.5816, the lowest since Nov. 4.

“Over the last day or so, the spike higher in yields has hurt risk sentiment in markets, we saw a sell off overnight in global equity markets and that risk-off trading is driving FX markets particularly in the high-beta commodity currencies,” said Lee Hardman, senior currency analyst at MUFG.

The Japanese yen gained slightly on the day but remained near the 150 level against the U.S. dollar, where traders see a risk that Japanese officials could intervene to shore up the currency. It was last at 149.78.

========================================================

Currency bid prices at 10:00AM (1400 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

Previous Change

Session

Dollar index 106.2800 106.5400 -0.24% 2.696% +106.6700 +106.2300

Euro/Dollar $1.0577 $1.0537 +0.37% -1.29% +$1.0581 +$1.0528

Dollar/Yen 149.7750 149.9250 -0.09% +14.25% +149.8800 +149.6650

Euro/Yen 158.41 157.95 +0.29% +12.91% +158.4800 +157.6900

Dollar/Swiss 0.8962 0.8991 -0.31% -3.07% +0.9001 +0.8960

Sterling/Dollar $1.2147 $1.2140 +0.05% +0.44% +$1.2162 +$1.2093

Dollar/Canadian 1.3717 1.3717 +0.01% +1.25% +1.3741 +1.3711

Aussie/Dollar $0.6323 $0.6336 -0.21% -7.24% +$0.6339 +$0.6296

Euro/Swiss 0.9477 0.9472 +0.05% -4.22% +0.9484 +0.9461

Euro/Sterling 0.8705 0.8677 +0.32% -1.57% +0.8717 +0.8673

NZ $0.5838 $0.5855 -0.29% -8.06% +$0.5858 +$0.5816

Dollar/Dollar

Dollar/Norway 11.0350 11.0340 -0.05% +12.37% +11.1120 +11.0260

Euro/Norway 11.6712 11.6321 +0.34% +11.22% +11.7128 +11.6181

Dollar/Sweden 10.9766 11.0175 +0.05% +5.47% +11.0614 +10.9660

Euro/Sweden 11.6101 11.6041 +0.05% +4.13% +11.6525 +11.6000

 

(Reporting by Karen Brettell; Additional reporting by Alun John in London; Editing by Alison Williams)

Recent Post: