10-year bond yields rise 3 basis points, hitting 12-week highs, as investors look forward to a stronger U.S. economy.
He dollar reached its highest level in two and a half monthsdue to expectations that the Federal Reserve take a measured stance in easing monetary policy as the tight U.S. election campaign kept investors in suspense.
The strength of the dollar, driven by the increase in US Treasury bond yieldmaintained pressure on the yen, the euro and the pound sterling, a trend that has been consolidating in recent weeks, as lTraders reduce their bets on a rapid reduction in interest rates in the United States. 10-year bond yields rise 3 basis points, hitting 12-week highs, as investors look forward to a stronger U.S. economy.
Some analysts argue that the release of the Beige Book on Wednesday could be the biggest threat to the dollar this week, as the previous summary of economic conditions in the United States is considered by some to be the main trigger for the Fed’s September 50 basis point rate cut.
“The dollar has risen recently due to the revaluation of expectations for the Fed’s monetary policy and because uncertainty over the US elections reduced risk appetite, favoring safe-haven assets,” said Nick Andrews, strategist at HSBC.
The elections in the US keep investors in suspense
However, the US elections remain the main focus of attention. Markets expect the dollar to respond more strongly to a Republican victory, which would open the door to further increases in trade tariffs combined with fiscal stimulus.
The dollar index, which compares the greenback with a basket of six major currencies, was trading at 103.91 units, after touching 104.02 on Monday, its highest level since August 1. So far this month, the index has added more than 3%.
The euro was trading at $1.0827, near its lowest since August 2, while the pound was trading at $1.3006, around its lowest level since August 20. The yen was flat at 150.88 per dollar, after hitting a nearly three-month low of 151.10.
Source: Ambito
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