Fundamental Comment

High yield on US Treasury bonds keeps dollar firm


The U.S. dollar managed to hold its gains during the week, on the way to record a rise for the third week in a row buoyed by the rise in the yield on 10-year Treasury bonds, which hit record levels today.

The dollar index, which measures the performance of the federal currency against a basket of six currencies, is currently trading at 93.36, close to a five-month high of 93.50, while the yen fell and hit its lowest level during the Asian session at 93.22.

The absence of economic data from the U.S. today may not affect the movements of the dollar, as the soar of the yield on 10-year government bonds to its highest level in seven years to 3.128% could help the dollar remain firm.  

The dollar has become the most trusted currency in the market in recent weeks because of its steady monetary policy, which maintains gradual easing, where the nearest major central banks, whether the European Bank or the Bank of England continue with their stimulus programs.

On the other hand, the trade tensions caused by the United States after announcing the lifting of tariffs on imports of steel and aluminum continue to affect the markets, but investors find the dollar in a position of strength better than other currencies.

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