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Dollar holds most weekly gains as Treasury yields stay elevated

Brown Brothers Harriman expects near-term upside risks for the dollar, with upcoming US PMI data seen as a test of whether US growth outperformance persists.

Reported · Written up by our desk · Major Pairs

Brown Brothers Harriman’s Elias Haddad said the US dollar is retaining most of its weekly gains because US Treasury yields remain elevated. The firm points to support from US economic outperformance, hawkish pricing around the Fed, and strong foreign demand for long-dated US securities.

BBH said the next release of US PMI data will be closely watched to see whether the US growth advantage remains intact, a factor that could influence near-term currency direction. The note frames risks for the dollar as skewed to the upside in the near term.

In other major pairs, GBP/USD stays below 1.3400 as the dollar rebounds, while EUR/USD holds above 1.1400 for a second day. EUR/USD support is tied to anticipation ahead of the European Central Bank’s interest rate decision, with any signals on further hikes expected to be closely watched.

FXStreet also reported that gold held a pullback near the $4,100 level, and that US crude oil moved higher toward $90 on renewed US and Iran tensions. The bulletin links the firmer oil to rising inflation fears and to expectations for Fed rate hikes, which can weigh on yieldless bullion.

Latest closeGold $4,117.00 ▲1.1%|WTI crude $87.52 ▲3.1%|EUR/USD 1.141 ▼0.0%

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