The U.S. dollar fell against major currencies at the beginning of the week, after rising last week, despite optimistic statements from Federal Reserve Chairman William Dudley, as the yen's strength and falling bond yields had another view.
The dollar index, which measures the performance of the green currency against a basket of six currencies, fell today and hit a low of 89.48 after opening the session at 89.80, while currently trading at 89.51.
Federal Reserve Board member Dudley said the central bank will continue to raise interest rates gradually as the US economy continues to grow steadily in all sectors, and on strong global growth, which is buoyed by the stability in the global financial situation.
Dudley sees the labor market as strong and wage growth rates will improve, which will support inflation.
The comments failed to support the dollar as the 10-year US bond yield slumped to a two-week low of 2.851, after hitting a four-year high of 2.957 last week.
The dollar's move is associated with a positive correlation with the bond yield, which pushed the dollar lower today as a slight correction to last week's rally, ahead of Federal Reserve Chairman Jerome Powell's testimony before the US Congress.
On the other hand, the Japanese yen rose at the beginning of the week to the highest level in five sessions, as investors wanted to balance their trading, which prompted them to transfer investments to the refuge Japanese yen.
The USDJPY pair hit a five-session low at 106.37 after opening the day at 107.19, while currently trading at 106.56.
The yen’s gains came despite a recovery in Asian equity indices, which
were supposed to have a negative impact on the yen’s movements, which is an
alternative investment for equities.