Strong 10Y US state bonds keep boosting US dollar
US dollar has remained on the rise in Asia on Wednesday boosted by further strengthening of 10-year state bonds in the USA.
The US Dollar index moved up to 90.85 Wednesday morning.
Investors have mostly switched from the trade war issue to an increase in 10Y Treasuries in the USA as the tensions between the USA and China have somewhat softened lately. The state-bond yields have reportedly hit the 3% level, the peak recorded since early 2014. The increase is related to fears of higher-pace inflation and speculations about possible more aggressive interest rate revision in 2018, as news reports read.
For reference, the yield is a guideline for mortgage rates and other financial tools. Thus, high yields can push interest rates up and spendings down, putting pressure on the stock market.
The Australian dollar decreased to 0.7566 against the greenback even despite the market shutdown for Anzac Day.
The US dollar-to-yen exchange rate has reached 109.23. The gap between 10Y state bonds of the USA and Japan peaked at 294 bp, the highest level since 2007.
25 April, 2018 14:44
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