U.S. Dollar Advances Amid Higher Treasury Yields
May 31 2022 - 12:18AM
RTTF2
The U.S. dollar appreciated against its major counterparts in
the Asian session on Tuesday, as U.S. treasury yields rose amid
expectations that the Federal Reserve would pursue an aggressive
policy tightening to bring inflation under control.
In a speech at the Institute for Monetary and Financial
Stability in Frankfurt, Germany, Federal Reserve governor
Christopher Waller said that he favored 50 basis point hike at
every meeting until there is a substantial reduction in
inflation.
U.S. treasury yields rose, with the benchmark 10-year yield
touching 2.84 percent.
Risk sentiment dampened after the European Union agreed on a ban
to block Russian oil being transported through sea by the end of
this year.
U.S. President Biden will hold a meeting with Federal Reserve
Chair Jerome Powell to discuss the state of the economy and
inflation.
The greenback rose to 1.0729 against the euro, from a low of
1.0779 set at 6 pm ET. The greenback may possibly challenge
resistance around the 1.05 level.
The greenback climbed to a 5-day high of 0.9614 against the
franc and a 4-day high of 1.2591 against the pound, from a prior
low of 0.9564 and a 4-day low of 1.2655, respectively. The
greenback is seen finding resistance around 0.99 against the franc
and 1.22 against the pound.
The greenback advanced to near a 2-week high of 128.34 against
the yen and a 4-day high of 0.6516 against the kiwi, after dropping
to 127.51 and near a 4-week low of 0.6564, respectively earlier in
the session. The next possible resistance for the greenback is seen
around 130.00 against the yen and 0.62 against the kiwi.
The greenback staged a modest recovery against the loonie, with
the pair trading at 1.2679. On the upside, 1.28 is possibly seen as
the next resistance level.
In contrast, the greenback held steady against the aussie, after
having rebounded from near a 4-week low of 0.7204 seen 8 pm ET. The
pair was worth 0.7194 at yesterday's close.
Looking ahead, Eurozone flash inflation for May is scheduled for
release in the European session.
Canada GDP data for the first quarter, U.S. FHFA's house price
index and S&P/Case-Shiller home price index for March and
consumer confidence index for May will be featured in the New York
session.
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