U.S. Dollar Drops As Treasury Yields Retreat; Fed Minutes Due
05 January 2022 - 6:43PM
RTTF2
The U.S. dollar weakened against its major counterparts in the
European session on Wednesday, as the continued rise in coronavirus
cases in the country lifted the safe-haven treasuries, while
investors awaited minutes from the Federal Reserve's latest meeting
for more clues about the timing of the first rate hike.
Treasury yields retreated, with the benchmark yield on the
10-year note falling to 1.65 percent. Yields move inversely to bond
prices.
The U.S. recorded more than one million new Covid cases on
Monday, driven by a surge in the Omicron variant.
Total infections in the country exceeded 55 million and the
death toll surpassed 826,000.
The Federal Reserve will publish the minutes from the December
meeting later in the day.
Money markets are currently pricing in a high probability of a
Fed rate increase in May, followed by two more by the end of the
year.
The greenback held steady against its major rivals in the Asian
session, except the euro.
The greenback dropped to 2-day lows of 0.7260 against the aussie
and 1.1324 against the euro, from Tuesday's closing values of
0.7239 and 1.1287, respectively. The greenback is seen finding
support around 0.75 against the aussie and 1.16 against the
euro.
The greenback edged down to 1.3555 against the pound and 0.9141
against the franc, compared to yesterday's closing quotes of 1.3526
and 0.9156, respectively. The next likely support for the greenback
is seen around 1.37 against the pound and 0.90 against the
franc.
The greenback, which ended Tuesday's deals at 0.6806 against the
kiwi and 116.13. against the yen, dropped to 0.6822 and 115.62,
respectively. The currency may target support around 0.70 against
the kiwi and 112.00 against the yen.
The greenback, however, rose against the loonie with the pair
worth 1.2732. The greenback was trading at 1.2703 against the
loonie at yesterday's close. The greenback is likely to test
resistance around the 1.30 level.
Looking ahead, U.S. ADP private payrolls data for December is
scheduled for release at 8:15 am ET.
Canada building permits and new housing price index for November
will be published in the New York session.
The Fed minutes from the December 14-15 meeting are set for
release at 2:00 pm ET.
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