Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

U.S. dollar gains, tracks rise in Treasury yields

Published 27/09/2021, 03:34
Updated 27/09/2021, 20:20
© Reuters. FILE PHOTO: A U.S. hundred dollar bill and Japanese 10,000 yen notes are seen in this photo illustration in Tokyo, February 28, 2013. REUTERS/Shohei Miyano/File Photo

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The U.S. dollar advanced for a second straight session on Monday, bolstered by the rise in Treasury yields ahead of a slew of Federal Reserve speakers this week who could affirm expectations of the start of asset purchase reduction before the end of the year.

U.S. benchmark 10-year Treasury yields hit a three-month high of $1.516% on Monday. [US/]

Fed officials, including one influential board member, on Monday tied reduction in the Fed's monthly bond purchases to continued job growth, with a September employment report now a potential trigger for the central bank's bond "taper."

Fed Chair Jerome Powell, who will join Treasury Secretary Janet Yellen, speaks before Congress on Tuesday.

The dollar index, which measures the U.S. currency against six major rivals, rose 0.1% to 93.37.

The greenback also extended gains after data showed new orders and shipments of key U.S.-made capital goods increased solidly in August, rising 0.5% in August amid strong demand for computers and electronic products.

But the market has been more focused on the U.S. Treasury market.

U.S. yields climbed to their highest since late June in anticipation of tighter monetary policy after the Fed announced last week it may start tapering stimulus as soon as November and flagged interest rate increases may follow sooner than expected.

"As much as taper in and of itself is not a surprise, an earlier end to its program will reinforce that downside risks to the U.S. dollar have diminished," Mazen Issa, senior FX strategist at TD Securities, wrote in a research note.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

TD expects the Fed to end its quantitative easing program by June 2022.

"If the last taper cycle was any indication, about half of the U.S. dollar's cyclical upswing was observed three months after taper," he added.

The euro slipped 0.1% against the dollar to $1.1698, largely ignoring developments in German elections over the weekend, with the Social Democrats projected to narrowly defeat the CDU/CSU conservative bloc.

The dollar rose 0.3% versus the yen to 110.99 yen, after earlier rising to a nearly three-month high. It gained 0.2% versus the Swiss franc to 0.9259 francs.

"The buck has no real reason to decline from where it is, so it will be about looking for what may actually change that as we hear from various sides this week: a new German leadership, a new Japanese head of state, and the U.S. Congress," said Juan Perez, FX strategist and trader at Tempus Inc in Washington.

The risk-sensitive Australian dollar rose 0.4% to US$0.7289 as fears of widespread market contagion from indebted China Evergrande Group ebbed.

Concerns that Evergrande, China's second-largest developer, could default on its $305 billion of debt have overshadowed trade in recent weeks, but some of those contagion fears are receding.

The People's Bank of China injected a net 100 billion yuan ($15.5 billion) into the financial system on Monday, adding to the net 320 billion yuan last week, the most since January.

========================================================

Currency bid prices at 3:08 PM (1908 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Previous Change

Session

Dollar index 93.3840 93.2680 +0.13% 3.782% +93.4940 +93.2060

Euro/Dollar $1.1698 $1.1722 -0.20% -4.25% +$1.1730 +$1.1685

Dollar/Yen 111.0000 110.7350 +0.25% +7.44% +111.0600 +110.5300

Euro/Yen 129.84 129.75 +0.07% +2.30% +129.9300 +129.4900

Dollar/Swiss 0.9260 0.9243 +0.19% +4.67% +0.9291 +0.9246

Sterling/Dollar $1.3707 $1.3670 +0.29% +0.34% +$1.3729 +$1.3661

Dollar/Canadian 1.2620 1.2657 -0.27% -0.88% +1.2672 +1.2610

Aussie/Dollar $0.7289 $0.7257 +0.42% -5.26% +$0.7291 +$0.7250

Euro/Swiss 1.0831 1.0831 +0.00% +0.22% +1.0864 +1.0825

Euro/Sterling 0.8534 0.8565 -0.36% -4.51% +0.8583 +0.8528

NZ $0.7019 $0.7015 +0.06% -2.26% +$0.7033 +$0.6990

Dollar/Dollar

Dollar/Norway 8.6030 8.5970 +0.10% +0.22% +8.6090 +8.5530

Euro/Norway 10.0653 10.0623 +0.03% -3.84% +10.0870 +10.0250

Dollar/Sweden 8.6972 8.6462 +0.36% +6.11% +8.7080 +8.6294

Euro/Sweden 10.1741 10.1380 +0.36% +0.97% +10.1898 +10.1165

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.