Tuesday, buoyed by the recent rise in U.S. bond yields, the United States dollar held firm against its major currency rivals. According to the dollar index, the greenback inched by approximately 0.1% and traded at 89.392 from its three-year low of 88.43 capped last week. This positive stance of the dollar was due to the support brought by the recent rise in the U.S. 10-year Treasury yield which climbed and settled at 2.727 and is considered as its strongest since 2014.
Against euro, the greenback settled at $1.2375 which stands below euro’s peak of $1.2538 reached last week. Against the Japanese safe-haven-yen, the dollar settled at 108.87 JPY=, which was 0.1% higher from the currency’s previous settlement.
In accordance to this, Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore mentioned that the current rise in United States bond yields supported the dollar. In addition, investors and analysts are now focused on the United States Federal Reserve policy meeting which will held on Tuesday which could indicate the likelihood of an announcement for the anticipated rate hike.
According to reports, the U.S. Federal Reserve is expected to keep interest rates unchanged as the two-day policy meeting occurs on Tuesday. In addition, analysts and investors are now shifting their focus on the central bank’s estimation of the economy and inflation for signs on the monetary policy perspective.