In the News

Dollar Diverges From Yields, Yen Orbits 150 Level: Inside G-10

Bloomberg- The dollar extended declines, even as the 10-year Treasury yield crossed 5% for the first time in 16 years before reversing. The British pound and the euro were leading gains against the greenback in the Group-of-10 currencies.


  • Bloomberg Dollar Spot Index drops 0.3% in a third day of declines
    • “The reversal lower in US yields is taking a toll on the dollar,” said Win Thin, who heads currency strategy at Brown Brothers Harriman in New York. “The Fed has added to the volatility in rates markets”
    • “Lots of Fed members have mentioned over the last couple weeks that surging yields could in effect take the place of any further tightening of interest rates, so it makes more sense that BBDXY is remaining relatively flat,” said Helen Given, an FX spot trader at Monex USA
      o Leveraged funds boosted bullish bets on the dollar while asset managers trimmed dollar shorts, based on the latest data from the Commodity Futures Trading Commission as of Oct. 17
    • “Fed speakers are increasingly cautious on their assessment of the economy, downplaying the hard data that point to a bounce,” said Steven Englander at Standard Chartered Bank. “It is also possible that ongoing geopolitical concerns are adding to USD asset sales, but it is difficult to tell what is being bought as an alternative”
  • USD/JPY little changed at 149.81 after rising above 150 for the first time since Oct. 3; speculation that the Bank of Japan will make some kind of policy move this month continues to build with the weak yen
  • GBP/USD rose 0.5% to 1.2222
  • EUR/USD reverses losses, climbed 0.5% to 1.0644
  • The Norwegian krone and Swedish krona were the only two currencies in the group falling against the US dollar
    • USD/NOK rose 0.1% to 11.0792; USD/SEK rose as much as 0.8%, later traded near flat
  • Some information comes from FX traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly
Reporting By Anya Andrianova and Vassilis Karamanis

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