Washington, DC, April 19 (BNA): The dollar steadied on Wednesday after swinging with bond market volatility in recent sessions, as investors scrutinized US economic indicators, Federal Reserve comments and corporate earnings for clues about the path of interest rates.
The dollar index, which tracks the greenback against six major peers, rose 0.09% to 101.81 in Asian trade, after falling 0.36% on Tuesday and reversing a 0.54% rise in the previous session. On Friday, the index fell to a one-year low of 100.78.
Reuters reported that two-year US Treasury yields, which are highly sensitive to the Fed’s outlook, hit a near-month high of 4.231% overnight and remained elevated in Tokyo trading on Wednesday.
The dollar-yen pair, which tends to track US yields, rose 0.19% to 134.35 yen per dollar, rebounding from a 0.29% decline on Tuesday.
St. Louis Federal Reserve Chairman James Bullard told Reuters in an interview that he’s leaning towards 75 basis points of additional tightening, against the market consensus for an additional 25 basis points increase next month, and then potentially a cut of up to a quarter of a point later. from this year.
By contrast, Atlanta Fed Chairman Raphael Bostick said in an interview with CNBC that he expects an additional quarter-point increase, followed by a prolonged pause.
said Ray Atrell, chief foreign exchange strategist at the National Australia Bank.
“It is volatility in the bond market that is driving the dollar, not the other way around.”
The dollar’s slide on Tuesday was also driven by waning demand for its safety after what Atrell described as “blockbuster” Chinese economic growth data that day, which in turn boosted the risk-sensitive Australian currency.
The Australian dollar was roughly flat at $0.6730 on Wednesday, after rising 0.41% in the previous session.
The euro eased slightly to $1.0967 after rising 0.42% on Tuesday. Sterling fell a touch to $1.2420 after advancing 0.38% the previous day.
Last year the dollar index peaked in 16 months reaching a two-decade high of 114.78 at the end of September, followed by a sharp and steady decline through the beginning of February.
WWA