U.S. Dollar Weakens Amid Declining Bond Yields
24 May 2021 - 2:10PM
RTTF2
The U.S. dollar depreciated against its most major counterparts
in the Asian session on Monday, in tandem with falling treasury
yields, as investors pinned hopes on the Fed maintaining its easy
monetary policy in the coming months.
Inflation expectations eased as investors digested the Fed's
commitment to its dovish policy.
U.S. treasury yields fell, with the benchmark yield on 10-year
note touching 1.62 percent. Yields move inversely to bond
prices.
Investors await reports on U.S. new home sales, consumer
confidence, durable goods orders and personal income and spending
due this week for more direction.
The White House lowered its infrastructure bill to $1.7 trillion
from $2.25 trillion by reducing spending on broadband, roads,
bridges and major infrastructure projects.
Still, Senate Republicans did not consider the new proposal as a
significant improvement from the original package.
The greenback eased off from an early 4-day high of 1.4137
against the pound, dropping to 1.4167. The greenback is seen
finding support around the 1.45 region.
The greenback fell to 1.2198 against the euro and 108.70 against
the yen, off its prior highs of 1.2172 and 109.00, respectively. On
the downside, 1.24 and 107.00 are possibly seen as its next support
levels against the euro and the yen, respectively.
The greenback was trading at 1.2055 against the loonie, 0.7187
against the kiwi and 0.7744 against the aussie, down from its early
highs of 1.2078 and 0.7160 and a 5-day high of 0.7714,
respectively. The currency is likely to target support around 1.18
against the loonie, 0.74 against the kiwi and 0.80 against the
aussie.
On the flip side, the greenback remained higher against the
franc, at 0.8976. The greenback may test resistance around the 0.92
level, if it rises again.
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