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​​Dollar steady, euro recovers on better than expected data

 

The dollar index was little changed on the day at 96.461, after reaching a 16-month high of 96.61 in overnight trading.

The dollar hit a four-and-a-half year high against the Japanese yen of 115.08 yen.

The euro gained 0.16% against the dollar to $1.1251, after earlier hitting a 16-month low of $1.1226.

The euro bounced off 16-month lows, meanwhile, helped by better-than-expected business growth in the region.

“Markets perceived the outcome as marginally hawkish, and futures now firmed up expectations for a hike in June from having been skewed toward July,” currency analysts at Brown Brothers Harriman said in a note on Tuesday.

Data on Tuesday showed U.S. business activity slowed moderately in November amid labor shortages and raw material delays, contributing to prices continuing to soar halfway through the fourth quarter.

 

The euro has some short-term technical support in the $1.1240 - $1.1180 area, which were the highs reached in October and December 2019, Commerzbank technical analysts Karen Jones and Axel Rudolph said in a report on Tuesday. If it breaks below this area, however, it would likely fall to $1.1000, which is the 78.6% retracement of 2020’s move, they said.

 

Treasury yields rise as investors digest Powell renomination, 10-year yield tops 1.67%

U.S. Treasury yields fell on Tuesday morning, as investors continued to digest the news that Jerome Powell had been renominated to the role of Federal Reserve chair.

 

The yield on the benchmark 10-year Treasury note rose by about 5.4 basis points to 1.679% on Tuesday afternoon. The yield on the 30-year Treasury bond rose by a similar amount to 2.036%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

 

Turkish lira crashes to ‘insane’ historic low after President Erdogan sparks sell-off

Turkey's lira dived 15% in its second-worst day ever after President Tayyip Erdogan defended recent sharp rate cuts and vowed to win his "economic war of independence" despite widespread criticism and pleas to reverse course.

Turkey’s lira crashed to a record low of 13.44 to the dollar on Tuesday, a level once unfathomable and well past what was just last week deemed the “psychological” barrier of 11 to the dollar.

The lira was trading at 12.7272 to the greenback at 4 p.m. local time on Tuesday, and was down around 15% on the day at one point, according to Reuters.

Reference: CNBC, Reuters