Dollar, U.S. bond yields drop
The dollar and U.S. bond yields fell on Monday as investors reversed a "Trumpflation" trade that has gripped markets since the U.S. elections, after oil prices slid on fears that producer countries meeting this week could fail to agree an output cut.
Prospects of reduced upward pressure on inflation from oil prices, prompted investors to temper expectations for rises in U.S. interest rates, bring down treasury yields and the dollar.
The dollar's index against a basket of six major currencies .DXY =USD stood at 100.88, slipping 0.6 percent on day and off its 13 1/2-year high of 102.05 touched on Thursday.
The yield on 10-year U.S. Treasuries US10YT=RR dropped almost 5 basis points to 2.323 percent, off its 16-month high of 2.417percent touched on Thursday.
PBOC’s Yi Says China’s Reserves Are ‘Very Adequate,’ Yuan Stable
People’s Bank of China Deputy Governor Yi Gang said the country has "very adequate" foreign reserves and the yuan remains strong compared with the other currencies the central bank uses to set the exchange rate.
The yuan has demonstrated stability and strength amid recent global currency volatility and the dollar’s rally to fresh highs, Yi said. Recent declines are due to a strengthening dollar driven by a U.S. economic recovery and rising inflation expectations, he said, adding that the dollar may pare gains.
Oil prices fall over doubts of planned crude output cut
Oil prices fell on Monday, adding to Friday's steep losses as doubts re-emerged over the ability of major producers to agree output cuts at a planned meeting on Wednesday aimed at reining in global oversupply.
Brent crude futures LCOc1 fell 2 percent at one point but regained ground to be trading down 24 cents, or half a percentage point, at $47 per barrel at 0439 GMT.
U.S. West Texas Intermediate (WTI) crude futures CLc1 also retraced early loses to be down 26 cents, or 0.6 percent, at $45.80 a barrel.
Reference: Reuters, Bloomberg
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