Dollar retreats as profit-taking, falling yields hurt
The U.S. dollar fell to a two-week low against a basket of currencies on Tuesday, as traders booked profits after a strong March and as a fall in Treasury yields from recent peaks put pressure on the U.S. currency.
The U.S. Dollar Currency Index, which measures the greenback against a basket of six currencies, was 0.239% lower at 92.341, its lowest since March 23.
The dollar has risen this year, along with Treasury yields, as investors bet the United States would recover more quickly from the coronavirus pandemic than other developed nations, amid massive stimulus and aggressive vaccinations.
At 2.5%, the gain in March was the dollar’s biggest monthly increase since the end of 2016.
U.S. Treasury yields fell on Tuesday, while U.S. stocks hit a fresh high, further sapping demand for the safe-haven U.S. currency.
Against the Japanese yen, the dollar slipped 0.29% to 109.855 yen, a one-week low.
The International Monetary Fund raised its outlook for global economic growth again on Tuesday, forecasting worldwide output would rise 6% this year, reflecting a rapidly brightening outlook for the U.S. economy.
The upbeat assessment follows an encouraging U.S. jobs report on Friday and a solid U.S. services activity reading on Monday.
“The uptick in sentiment is likely a result of the IMF upgrading their global growth forecasts,” said Doyle.
Speculators’ net bearish bets on the U.S. dollar fell in the latest week to the lowest since June 2020, calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday showed.
Sterling slipped on Tuesday as investors withdrew some cash after cable jumped to its highest in more than two weeks, while traders continued to bet on a speedy reopening of the British economy.
Major cryptocurrency Ethereum reached a peak of $2,151.63 on Tuesday, before paring gains.
The rise of Ethereum, which like most smaller cryptocurrencies tends to move in tandem with bitcoin, has helped the cryptocurrency market capitalization reach a record $2 trillion on Monday, data and market trackers CoinGecko and Blockfolio showed.
Treasury yields fall as stocks slip from record highs
U.S. Treasury yields dipped on Tuesday morning as the S&P 500 and the Dow Jones Industrial Average settled back below their record highs.
The yield on the benchmark 10-year Treasury note fell to 1.654% in afternoon trading. The yield on the 30-year Treasury bond slipped to 2.316%. Yields move inversely to prices.
Reference: CNBC
Thai
Eng