Treasury yield curve flattens further after the Fed rate decision

Omkar Godbole FXStreet Contributor

The treasury yield curve i.e. the difference between the 10-year treasury yield and the 2-year treasury yield narrowed to 80 basis points after the Fed maintained the outlook for three rate hikes this year.

The 10-year treasury yield fell to 2.103%; the lowest level since November 10. The 10-year yield was last seen trading around 2.14%. The 2-year yield dropped to a low of 1.29% before staging a sharp recovery to 1.34%.

The yield curve or the difference stood at 85 basis points prior to the dismal CPI release and was seen hovering around 82 basis points ahead of the Fed rate decision.

The yield curve has been flattening since the start of the year and has been accompanied by the sell-off in the US dollar.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.