💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

FOREX-Dollar inches up on US yields, euro retreats from 1-month high

Published 14/03/2017, 11:48 am
FOREX-Dollar inches up on US yields, euro retreats from 1-month high
EUR/USD
-
USD/JPY
-
BARC
-
DX
-
US10YT=X
-
DXY
-

* Dollar supported with US yields near 3-month highs

* Wait-and-see mood before Fed meeting limits movements

* Hawkish-sounding comments from ECB officials temper euro

By Shinichi Saoshiro

TOKYO, March 14 (Reuters) - The dollar inched up against a basket of currencies on Tuesday as U.S. Treasury yields extended their rise ahead of an expected interest rate hike by the Federal Reserve.

The euro pulled back from multi-week highs after dovish-sounding comments from European Central Bank officials tempered its recent surge.

With a rate increase already seen as a done deal, investor focus was on what kind of a message the Fed would deliver after its two-day meeting starting later on Tuesday.

"The latest rise in Treasury yields is underpinning the dollar, but it is a wait-and-see mood that is mostly prevailing in the market ahead of the Fed's decision," said Shin Kadota, senior currency strategist at Barclays (LON:BARC) in Tokyo.

"Expectations for a hawkish dot plot was a factor that has pushed up the dollar recently, with hopes for the number of times the Fed could hike rates this year having increased to four from three."

The "dot plot" is policymakers' rate projections and provides a view into their interest rate outlook.

The dollar index against a group of major currencies .DXY was up 0.1 percent at 101.440, adding to modest gains made the previous day.

The U.S. currency was up 0.1 percent at 114.950 yen JPY= , having gone to 115.510 on Friday, its highest since Jan. 19.

The euro was 0.1 percent lower at $1.0647 EUR= .

The common currency had climbed to a one-month high of $1.0714 on Monday, boosted after some members of the ECB's Governing Council discussed the possibility of higher interest rates at last week's policy meeting.

But its rise was tempered later on Monday after ECB Governing Council member Jan Smets reportedly said last week's policy meeting was not a signal of coming policy change. Bank of France Governor Francois Villeroy de Galhau also said rising inflation in the euro zone was highly exaggerated. ahead of this week's elections in Holland also capped the euro. The Dutch will vote on Wednesday in an election that was seen as a test of anti-immigrant sentiment.

Sterling was little changed at $1.2211 GBP=D4 after gaining 0.4 percent overnight after Scotland's First Minister Nicola Sturgeon demanded a fresh Scottish independence referendum but said it should take place at the earliest in late 2018. GBP/

The Australian dollar was down 0.2 percent at $0.7559 AUD=D4 , giving back some of the previous day's gains.

The 10-year U.S. Treasury note yield US10YT=RR was at 2.620 percent after rising to 2.628 percent overnight, its highest since mid-December. (Editing by Randy Fabi)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.