Home›Forex›Major Pairs›U.S. dollar strengthens as Treasury yields rise

U.S. dollar strengthens as Treasury yields rise

The 2-year and 10-year Treasury yields rose about 4 basis points each, supporting the dollar as Fed balance-sheet concerns weighed on rate expectations.

Reported · Written up by our desk · Major Pairs

Forexlive reports the U.S. dollar strengthened as Treasury yields moved higher following a mixed set of economic signals, including retail sales that came in close to expectations and a sharp upside surprise in the Philadelphia Fed Manufacturing Index.

The outlet linked the stronger manufacturing reading to improved business sentiment after a Middle East ceasefire and a decline in oil prices, while noting housing data remained soft.

Even with that mixed backdrop, Treasury yields pushed up, with both the 2-year and 10-year yields rising around 4 basis points. Forexlive also points to Fed Chair Kevin Warsh reiterating that the Fed's balance sheet remains too large and should be reduced over time, which has added to speculation about more aggressive runoff increasing Treasury supply.

The rise in long-term rates, Forexlive notes, can tighten overall financial conditions without additional Fed rate hikes, which also factors into the dollar's renewed support across major currency pairs.

More like this

Sources