Dollar dips, off three-and-a-half month highs as Treasury yields stabilize
The dollar on Tuesday backed off its 3-1/2-month high as U.S. Treasury yields stabilized ahead of key inflation data and Treasury auctions this week, boosting riskier currencies such as the pound, Australian dollar and Kiwi dollar.
The save-haven dollar was 0.46% lower, at 91.95, against a basket of six major currencies, after hitting a 3-1/2-month high of 92.506 during Asian trading hours.
U.S. 10-year Treasury bond yields eased to 1.544% after reaching 1.613% on Monday, close to its 13-month high. Yields had been rising on expectations that a faster-than-expected economic rebound would spark a jump in inflation with President Joe Biden expected to sign a $1.9 trillion coronavirus aid package as soon as this week.
U.S. consumer price index and producer price index data, due on Wednesday and Friday, will also be closely watched.
The economic outlook has brightened globally as COVID-19 vaccine rollouts speed up in some countries and also due to the U.S stimulus package, the Organisation for Economic Cooperation and Development (OECD) said, hiking its forecasts.
The euro rose 0.47% to $1.19035 and sterling gained 0.58% to $1.3901.
Looking forward, traders are focused on the U.S. Federal Reserve’s two-day meeting next week. Expectations are low that the central bank will announce major policy changes after Chair Jerome Powell last week did not express concern about rising bond yields.
Reference: CNBC
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