The U.S. dollar climbed to a three-month peak on Tuesday in a flight-to-safety bid, as investors remained anxious about a fast-spreading coronavirus variant that could throttle global growth.
Commodity currencies tied to risk appetite such as the Australian, New Zealand and Canadian dollars struggled, with investors opting for safety or staying on the sidelines in the midst of renewed fears about the highly contagious Delta variant, now the dominant coronavirus strain worldwide.
The United States, for instance, has seen a surge in infections, especially in areas where vaccinations have lagged.
In mid-morning trading, the dollar index, a measure of its value against six major currencies, rose 0.2% to 93.086, after hitting a three-month high of 93.161 earlier in the session.
The euro weakened 0.3% to $1.1765, after dipping to $1.1755, the lowest since early April ahead of a European Central Bank policy decision on Thursday.
The British pound was also among the biggest losers, with the currency declining 0.5% to $1.3607 as Boris Johnson’s “freedom day” - ending more than a year of COVID-19 lockdown restrictions in England - was marred by surging infections.
The Australian dollar dropped to its lowest since late November and was last down 0.2% at US$0.7322.
TREASURIES-U.S. Treasury yields rebound from 5-month lows
Yields on 10-year Treasuries rebounded from five-month lows on Tuesday after the previous session's biggest single-day decline since February, as traders scrambled to hedge positions amidst the unexpected rally in U.S. bond prices.
Ten-year Treasury yields rose 2.9 basis points to 1.210%, after tumbling to 1.128% earlier in the session.
Trading was volatile. Ten-year Treasury yields overnight
rose to nearly 1.22%.
The yield on the 30-year Treasury bond gained
5.4 basis points to 1.869%.
Reference: CNBC, Reuters
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