U.S. Dollar Spikes Up As Treasury Yields Rise On QE Tapering Hopes
The U.S. dollar appreciated against its major rivals during the
European session on Tuesday amid rising treasury yields, as
investors bet on the possibility of the Fed reducing the size of
its asset purchase program soon and start raising interest rate
Market participants expect the Fed to make an announcement on
tapering in November following hawkish comments from the central
Inflation in the U.S. is elevated and could persist in the
coming months before dropping back towards the Fed's long-run 2
percent goal, Chairman Jerome Powell said in prepared remarks
before the Senate Banking Committe.
Powell will appear along with Treasury Secretary Janet Yellen at
an oversight hearing on the government's massive support programs
passed to deal with the COVID pandemic.
Fed Governor Lael Brainard said that the labor market would meet
her criteria for tapering immediately, whereas New York Fed
President John Williams indicated that slowing down the bond buying
program may be required soon.
U.S. treasury yields rose, with the benchmark 10-year yield
touching 1.52 percent.
The greenback climbed to a 5-day high of 1.3620 versus the pound
and near a 6-week high of 1.1672 against the euro, off its prior
lows of 1.3717 and 1.1703, respectively. The greenback is seen
finding resistance around 1.35 versus the pound and 1.15 against
The greenback rebounded from its previous lows of 0.9249 against
the franc and 110.94 against the yen and appreciated to an 8-day
high of 0.9295 and near a 3-month high of 111.42, respectively. The
greenback may possibly challenge resistance around 0.94 against the
franc and 113.5 against the yen.
The greenback was up at near a 5-week high of 0.6958 against the
kiwi and a 4-day high of 0.7242 against the aussie, rising from an
early low of 0.7027 and a 4-day low of 0.7311, respectively. The
next possible resistance for the greenback is seen around 0.68
against the kiwi and 0.70 against the aussie.
The greenback reached as high as 1.2657 against the loonie,
after falling to nearly a 3-week low of 1.2594 in Asian trading. On
the upside, 1.29 is possibly seen as its next resistance level.
Looking ahead, European Central Bank President Christine Lagarde
is due to deliver opening remarks at the 2021 ECB Forum on Central
Banking, via satellite at 8 am ET.
U.S. wholesale inventories and advance goods trade balance for
August and FHFA's house price index and S&P/Case-Shiller home
price index for July, as well as consumer confidence index for
September will be published in the New York session.
Federal Reserve Bank of Chicago President Charles Evans is set
to deliver opening remarks at the payment systems at a virtual
symposium hosted by the Federal Reserve Bank of Chicago at 9 am
Federal Reserve Chair Jerome Powell is scheduled to testify
about the Coronavirus and CARES Act before the US Senate Committee
on Banking, Housing, and Urban Affairs, in Washington DC at 10 am
Federal Reserve Governor Michelle Bowman is due to speak at the
Community Banking in the 21st Century Research and Policy
Conference, via satellite at 1:40 pm ET.
US Dollar vs Yen (FX:USDJPY)
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