Currencies Overview: Dollar Continues to Rally on Yield Gains

The dollar rose for the second session in a row today, as the increase in US Treasury bond yields prompted dealers to reduce their bet on the dollar’s ​​decline to its lowest level in four months.

The yield on the 10-year bond was trading at 1.6320% on Monday, close to Friday’s closing level of 1.6420%, a level last achieved in February. The increase in bond yields led the dollar to rise in recent weeks thanks to higher interest rate spreads compared to other major bond markets.

The dollar index, which tracks the movement of the US currency against six of its major counterparts, settled at around 91.84 in early trading in London today. It had reached 93.51 last week, its highest level since late November.

Higher Treasury yields will continue to dominate investor thinking this week ahead of the Federal Reserve meeting, during which analysts expect policymakers to speak in an optimistic tone about the US economy.

The US dollar rose 0.2% against the Japanese currency to 109.22 yen, to its highest level since June 2020.

The euro weakened 0.2% to $ 1.1925 after rising last week for the first time in three weeks, as the latest data showed that hedge funds had reduced net euro positions.

The Australian dollar fell 0.3% to $ 0.7732, extending losses after losing 0.4% on Friday.

The digital currency fell 1.4%, after hitting a record over the weekend at $ 61,781.83.