Forex

Dollar Jumps to 4-Week High on US bond yield hike

2019-05-21 13:40:49 GMT (Economies.com)

The U.S. dollar jumped to a four-week high against a basket of world currencies today, resuming gains that were temporarily halted yesterday amidst a day of respite, supported by a 10-year US Treasury yield hike, in addition to the continuation of dollar purchases as the best current investment in the foreign exchange market.

 

The dollar index rose by 0.2% to 97.96 points, the highest since April 26, from the opening level of 97.77 points, with the lowest level at 97.77 points.

 

Yesterday, the index lost 0.1%, the first loss in the past six days, due to correction and profit taking.

 

The 10-year US Treasury yield extended its recovery on Tuesday and hit a two-week high of 2.428%, extending the recovery from a two-month low of 2.354% recorded earlier in the week.

 

The rise is supported by improved investor risk appetite, especially as the US government eased trade restrictions on China's Huawei.

 

Federal Reserve Chairman Jerome Powell said on Monday it was too early to rule on the impact of the trade and tariff issues on monetary policy.

 

The dollar index rose 0.8% over last week, the first weekly gain in the last three weeks, with the activity of the US currency purchases as the best current investment in the foreign exchange market.

 

As the Euro faces Europe's economic fundamentals weakness and political concerns in Italy, with the pound falling under the shadow of Britain's chaotic exit from the EU, in addition to the currencies of Canada, Australia, and New Zealand falling under the pressure from prospects of an interest rates cut by their central banks.

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