A gauge of the dollar was 0.1 percent from the highest in almost a month as an increase in short-term U.S. Treasury yields signaled mounting expectations the Federal Reserve will raise interest rates.
The 20-day correlation between dollar-yen and yields on two-year Treasuries climbed yesterday to the highest since March, before a report today that may show consumer-price inflation held at the fastest pace since October 2012. The Australian dollar remained lower amid speculation Reserve Bank Governor Glenn Stevens will reiterate that the currency is overvalued when he speaks at a luncheon today.
“The U.S. dollar seems to be showing more sensitivity to what’s happening at the front end of the U.S. yield curve,” said Ray Attrill, global co-head of currency strategy at National Australia Bank Ltd. in Sydney. “That obviously reflects the view that the shorter end is taking on board the risk that the Fed could be minded to move on rates a little earlier than previously priced in.”
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.