The US tax reform news and the resulting steepening of the yield curve pushed the dollar index higher to 93.50 levels in Asia.
The Greenback found love after news hit the wires that US Senate approved the Republican-backed budget. This is widely seen as a major step forward for the GOP to enact tax cuts. Thus, the yields on the long duration treasuries hardened.
Currently, the 10-year yield is up 3.3 basis points (bps). The 30-yr yield is up more than 4bps. Meanwhile, the 2-yr yield remains flat lined. The yield curve has steepened/spread between the 10-yr and the 2-yr yield has widened to 80 bps.
Looking ahead - the USD may remain bid on tax reform talks. Fed's Yellen will speak today, but not until markets close. Kathy Lien from BK Asset Management writes, "most of the day will be spent guessing whether she'll be hawkish or dovish. Chances are, there will be limited new position-taking ahead of her lecture on monetary policy since the financial crisis.
Dollar Index Technical Levels
The index clocked a high of 93.53 earlier today and currently trades at 93.46 levels. A break above 93.80 (Oct 18 high) would open up upside towards 94.00 (zero levels) and 94.27 (Oct 6 high). On the other hand, a breakdown of support at 93.12 (session low) would expose 92.95 (Supp. offered by rising trend line) and 92.87 (50-day moving average).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of US jobs report
EUR/USD stays in a consolidation phase above 1.0700 after closing the previous two days in positive territory. Investors eagerly await April jobs report from the US, which will include Nonfarm Payrolls and Unemployment Rate readings.
GBP/USD advances to 1.2550, all eyes on US NFP data
The GBP/USD pair trades on a stronger note around 1.2550 amid the softer US Dollar on Friday. Market participants refrain from taking large positions as focus shifts to April Nonfarm Payrolls and ISM Services PMI data from the US.
Gold remains stuck near $2,300 ahead of US NFP
Gold price struggles to gain any meaningful traction and trades in a tight channel near $2,300. The Fed’s less hawkish outlook drags the USD to a multi-week low and lends support to XAU/USD ahead of the key US NFP data.
XRP edges up after week-long decline as Ripple files letter in reply to SEC’s motion
Ripple filed a letter to the court to support its April 22 motion to strike new expert materials. The legal clash concerns whether SEC accountant Andrea Fox's testimony should be treated as a summary or expert witness.
US NFP Forecast: Nonfarm Payrolls gains expected to cool in April
The NFP report is expected to show that the US economy added 243,000 jobs last month, sharply lower than the 303,000 job creation seen in March. The Unemployment Rate is set to stay unchanged at 3.8% in the same period.