The benchmark U.S. 10-year Treasury yield rose on Friday following its biggest two day drop in about three weeks after economic data indicated high inflation could persist for some time.
Investors have been highly attuned to labor market and inflation data for signs of when the U.S. Federal Reserve may announce plans to begin tapering its massive bond-buying program.
The yield on 10-year Treasury notes was up 4.1 basis points to 1.341%. For the week, the yield was up 3 basis points and on pace for its third straight weekly gain, which would mark the longest streak of weekly gains since a seven-week run that ended in mid-March.
The 10-year yield has traded between a high of 1.423% and a low of 1.127% since mid-July, and di Galoma expects that range to play out until early October.
Dollar gains with yields as Fed policy in focus
The dollar rose on Friday in line with higher U.S. Treasury yields as investors focused on when the Federal Reserve is likely to begin reducing its asset purchases.
The greenback has risen from a one-month low reached last Friday after jobs data for August showed that jobs growth slowed, while wage inflation rose more than expected.
Cleveland Fed President Loretta Mester said on Friday that she would still like the central bank to begin tapering asset purchases this year, joining the chorus of policymakers making it clear that their plans to begin scaling back support were not derailed by weaker jobs growth in August.
The dollar index gained 0.05% to 92.57 . It is up from a one-month low of 91.94 on Friday.
The U.S. currency had dipped earlier on Friday on improving risk sentiment on news that U.S. President Joe Biden and Chinese leader Xi Jinping spoke for the first time in seven months.
The dollar was last down 0.13% to 6.4419 yuan , nearing a more than two-month low of 6.4233 yuan reached last week.
Reference: Reuters
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