US Treasury Yields Continues to Buoy the Dollar

The US treasury yields remain the biggest supporter of the dollar.

The greenback crawled back to the center stage after the benchmark 10-year Treasury yields fell from positive territory earlier in the session.

It shed off 6 basis points from its 10-month high notched earlier in the week which resulted in a blow to the USD.

Nevertheless, the world’s reserve currency weathered the painful drop of the day and edged 0.3% against other entities in the basket.

The index which tracks its performance settled at 90.279, taking back the 0.5% loss incurred in Tuesday’s session.

In the latest charts, the USD JPY fell from the 104 territory which became its settlement in the earlier days of the week.

Today, the pair steadied at 103.62, weighed down by the growing number of coronavirus cases in Japan.

For the record, Prime Minister Yoshihide Suga reportedly considers putting three more prefectures under the state of emergency.

This came when the country faces a silent tumult from citizens over the preparations for the 2021 Tokyo Olympics.

In the two surveys conducted by separate entities, polls showed that 80% of the Japanese people oppose the resumption of the Games.

Around 15,000 athletes are expected to join the event, striking fears among the local population on the sudden surge of cases.

Currently, Japan battles the third wave of infections with no end yet in sight.

Meanwhile, in Europe, the euros could not take the pressure from the stronger dollar.

The common currency is 0.3% lower for the session and settled at $1.2168. This came after it made a sharp gain against the USD in the previous session.

Update on Foreign Exchange Charts

On the other hand, the sterling pound is undaunted by the greenback’s recent muscle-flexing. 

It climbed to $1.37, still boosted by the Bank of England’s statement hinting at the adoption of negative interest rates.

Antipodeans remain under pressure due to the diminishing risk sentiment among investors.

The Aussie shed off 0.4% to $0.7740 while the NZD fell by 0.6% to $0.7186 in the latest foreign exchange charts.

Analysts noted that the forecast for the US dollar remains on the bearish side, with US treasury yields being the only point of support for the upward movements.

The bond-market sell-off undeniably supported the American currency from falling further to multi-year highs despite the uncertainty in US politics.

All eyes are in the Federal Reserve’s issuance of the “Beige Book” on economic indicators scheduled later in the day.