Dollar index strengthens as the treasury yields rise
- USD finds love in Asia.
- Treasury yields rise on tax plan optimism, fading political uncertainty.
The dollar index (DXY) rose to a high of 93.09 in Asia as the treasury yields ticked higher on Senate's approval of tax overhaul and following the faulty ABC report on former National Security adviser Flynn.
As of writing, DXY is trading at 93.06; up 0.27 percent on the day. Meanwhile, the 10-year treasury yield is up close to four basis points at 2.4 percent.
Senate's approval of tax bill has brought Republicans and President Donald Trump a step closer to their goal of slashing taxes. The optimism is helping the USD gain altitude.
Meanwhile, unwinding of USD shorts initiated on Friday is boding well for the greenback as well. The greenback was dumped on Friday during the North American session after ABC news reported former national security adviser Michael Flynn would testify against President Trump.
Ahead in the day, the greenback could continue to track the treasury yields. The dollar may catch another bid wave at the European open on tax reform optimism.
Dollar Index technical levels
A break above 93.36 (100-day MA) would open up upside towards 93.50 (Nov. 30 high) and 93.76 (50-day MA). On the other hand, a break below 92.88 (previous day's low) could yield a pullback to 92.73 (Nov. 30 low) and 92.50 (Nov. 27 low).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
