Dollar Near Two-week Low as U.S. Yields Fall

In more than two weeks, the U.S. dollar was seen trading near its lowest against its major peers on Thursday. Moreover, tracking Treasury yields lower, after minutes of the Federal Reserve’s March policy meeting came out. The minutes showed no new catalysts to dictate market direction.

The U.S central bank officials were still cautious about the risks of the pandemic.  This was despite the U.S. recovery gathering steam amid massive stimulus. It also committed to pouring on monetary policy support until a rebound was more secure, the minutes showed on Wednesday.

Federal Reserve Chair Jerome Powell was scheduled to speak at a virtual International Monetary Fund (IMF) conference later on Thursday.

The dollar index fell to 92.30 in London trading. Previous to that, on Wednesday, it plunged to as low as 92.134 for the first time since March 23.

At the end of last month, the index rallied to an almost five-month high of 93.439. It was when the U.S. pandemic recovery outpaced most other developed nations, and Europe, in particular.

On Thursday, the benchmark 10-year Treasury yield was around 1.658%. Prior to this, it dipped below 1.63% overnight. Late last month, it touched 1.776%, its highest in more than a year.

Currencies Movements

The greenback weakened to 109.49 yen , consolidating after retreating from 110.97. It was its highest in more than a year, reached on March 31.

The euro was almost unchanged from Wednesday at $1.1876. Previously, it rebounded from $1.1704, its lowest in almost five months, reached on March 31.

USD/JPY lost 0.1% at 109.70, and GBP/USD added 0.3% at 1.3769. The EUR/USD gained 0.1% at 1.1881, after rebounding from the almost five-month low of 1.1704 at the end of March. The risk-sensitive AUD/USD climbed 0.3% at 0.7635.

The USD/CNY crept higher 0.09% to 6.5472 and the GBP/USD pair edged up 0.17% to 1.3758.

USD/PLN slid 0.2% to 3.8433, while EUR/PLN slipped 0.1% to 4.5640. This came after Poland’s central bank kept its benchmark interest rate at 0.1% for an 11th straight month on Wednesday.

Meanwhile, in stocks, on Wednesday, the S&P 500 eked out a modest gain, moving mainly sideways. It surged to a record high to start the week.