The dollar strengthened slightly as US bond yields rose

New York (Armfalcon.com) – The US dollar strengthened slightly against a basket of other major currencies in late trading Wednesday (Thursday morning WIB), lifted by rising US government bond yields as investors differed on the Federal Reserve’s opinion.

The US dollar index, which measures greenbacks against six other major currencies, it was up 0.23 percent to 101.9695 in late trading.

In late New York trading, the euro fell to US$1.0952 from US$1.0973 of the previous session, and the British pound rose to US$1.2438 from US$1.2429 in the previous session.

The US dollar bought 134.7260 Japanese yen, higher than 134.0580 Japanese yen in the previous session. The US dollar increased to 0.8976 Swiss franc from 0.8970 Swiss franc, and it increased to 1.3462 Canadian dollars from 1.3392 Canadian dollars. The US dollar increased to 10.3451 Swedish krona from 10.3073 Swedish krona.

The Mortgage Bankers Association reported Wednesday (19/4/2023) that for the week ended April 14, US mortgage applications fell 8.8 percent from the previous week. The previous reading was a week-over-week growth of 5.3 percent.

US government bond yields continued to rise as investors digested the comments hawkish Fed officials. The yield on the 2-year note reached 4.3 percent on Wednesday (19/4/2023) while the yield on the 10-year government bond held above 3.6 percent.

“But the dollar’s gains are a temporary reprieve,” said Bipan Rai, head of North American FX strategy at CIBC Capital Markets in Toronto.

“We still think that in the medium to long term the dollar will continue to be under considerable pressure. And that ties into our view that the Fed will probably raise (rates) one more time and that’s it.”

Eurostat reported Wednesday (19/4/2023) that the euro zone’s harmonized consumer price index (HICP) increased 6.9 percent in March year-on-year, down from 8.5 percent growth in February. This was in line with economists’ expectations. The inflation rate remains high and well above the European Central Bank’s target of 2.0 percent.

The UK Office for National Statistics (ONS) reported on Wednesday that the UK consumer price index (CPI) in March increased 10.1 percent year-on-year, down from the previous reading of 10.4 percent. Economists had forecast year-over-year growth of 9.8 percent.

The UK producer price index (PPI) year-on-year growth cooled to 7.6 per cent in March. The previous reading was revised to 12.8 percent from 12.7 percent. Economists had forecast a reading of 7.0 percent for March.

Also read: Oil prices lose growth momentum amid inflationary pressures
Also read: Gold prices slipped due to fears of rising US interest rates
Also read: The US dollar regains its footing in the Asian session as yields rise

Translator: Apep Suhendar
Editor: Faisal Yunianto
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