The currency rose in tandem with U.S. Treasury yields as traders closely watch the Federal Reserve’s forecasts.
He global dollar rose this Thursday, on par with the yields of the United States Treasury bonds, due to expectations that the US currency will appreciate next year thanks to the policies of the incoming administration of donald trump which are expected to drive growth and raise the inflation.
He dollar index — which measures the greenback’s performance relative to a basket of six other internationally relevant currencies — rose 0.02% to 108.13, just below a two-year high of 108.54 hit on Friday. .
Since the president of the Federal Reserve, Jerome Powellprimed markets for fewer rate cuts next year at the latest meeting monetary policy central bank of the year, traders are now pricing in just about 35 basis points of easing by 2025. That, in turn, has lifted U.S. Treasury yields and the dollar, and the greenback’s renewed strength has been a drag on raw materials and gold.
The benchmark 10-year yield rose 2.6 basis points to 4.613% and is up about 40 basis points so far this month. The two-year yield also strengthened to 4.3489%.
“Given the aggressive cut in December, we believe the Fed will not attend the meeting Federal Open Market Committee (FOMC) January and will wait for more data before definitively resuming, or potentially ending, this cycle of cuts,” Reuters said. Tom Porcelli, chief economist of the United States in PGIM Fixed Income. “Given the change in Fed “Towards a less expansionary policy, together with the continued focus on both sides of the dual mandate, we believe that the market will have a more intense emphasis on economic events in the new year,” he added.
The strength of the dollar against the yen
He dollar It gained 0.35% to 157.93 Japanese yen and earlier hit 158.09, its highest level since July 17. The yen has suffered from the wide interest rate differential between United States and Japan.
He Bank of Japan expects the economy to come close to sustainably meeting the central bank’s 2% inflation target next year, the governor said Wednesday Kazuo Ueda suggesting that the time for the next interest rate increase was approaching.
Meanwhile, the euro rose 0.13% to $1.0418 and, in cryptocurrencies, the bitcoin fell 2.88% to $95,598.
Source: Ambito
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