PT Solid Gold Berjangka | Dollar Rides Treasury Yields Higher, Yen Battered
The dollar traded near a 10-month high against its major peers on Wednesday as Treasury yields stayed elevated on the prospect of higher-for-longer U.S. rates, while the yen stumbled towards a closely-watched intervention zone.
Sterling slid to a fresh six-month low of $1.2145 in early Asia trade, coming under pressure against a stronger greenback. It looked set for a quarterly decline of more than 4%, its worst in a year.
The U.S. dollar index last stood at 106.20, having peaked at a 10-month high of 106.26 in the previous session, while the euro languished near Tuesday’s six-month low and last bought $1.0569.
Fed officials have in recent days flagged the possibility that the central bank would need to raise interest rates further, after it kept rates steady last week but stiffened its hawkish monetary policy stance.
That has sent U.S. Treasury yields scaling multi-year highs as money markets adjust their expectations of where U.S. rates could peak, and for monetary conditions to remain tighter for longer than initially thought.
The benchmark 10-year yield was last at 4.5254%, after hitting a 16-year high of 4.5660% in the previous session. The two-year yield stood at 5.0582%.
The elevated U.S. yields have spelt trouble for the yen , which edged marginally higher to 149.01 per dollar, after having slipped to a 11-month low of 149.185 on Tuesday.
The dollar/yen pair tends to be extremely sensitive to changes in long-term U.S. Treasury yields, particularly on the 10-year front.
The yen’s slow-but-steady decline to the psychological level of 150 per dollar has kept traders on high alert for any signs of intervention from Japanese authorities, as officials ramp up their rhetoric against the sliding currency.
The 150 zone is seen by financial markets as a red line that would spur Japanese authorities to intervene, like they did last year.
Elsewhere, the Aussie fell 0.04% to $0.6395, ahead of Australian inflation data due later on Wednesday.
Source : Reuters