US-German two-year yield spread hits lowest since October 2017

The US-German bond yield differential narrows to lowest since October 2017.
The narrowing of yield spread has failed to put a bid under the EUR.

Omkar Godbole FXStreet Contributor

The spread between the US and German two-year government bond yields fell to 232 basis points on Wednesday – the lowest level since Oct. 25, 2017.

Notably, the yield differential is down 126 basis points from the high of 358 basis points registered in August 2018.

Even so, EUR/USD is nursing 3.61% losses on a year-to-date basis, having dropped by 4.66% in 2018.

The data indicates the correlation between the two-year yield differential and EUR/USD has broken down.

Two-year yield spread

Author

Omkar Godbole

FXStreet Contributor

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

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