Tuesday, the dollar rise and hits a near five-week high against the safe-haven yen, which is considered as the greenback’s highest level. Earlier on Tuesday the dollar rose up to 112.075 yen, its highest level since May 24. It traded last at 111.88 yen, which is up slightly on the day. In accordance to this, this improvement occurs ahead of comments from Federal Reserve Chair Janet Yellen, which is expected to highlight her positive outlook of the United States economic outlook.
This is despite a recent batch of feeble United States economic data would support the Federal Reserve’s forecast for another interest rates hike later this year. As what Kaneo Ogino, director at FX research firm Global-info Co in Tokyo have said, that hedge funds are already selling yen this week, and positive comments from Yellen could provide them an excuse to sell even more.
Janet Yellen is scheduled to take part in a discussion later on Tuesday at the London’s Royal Academy.
In addition, on Monday, the U.S. data gave investors reason to be careful about buying the dollar, as new orders for key U.S.-made capital goods surprisingly fell in May; shipments were also declined as well, suggesting a loss of momentum in the manufacturing sector halfway through the second quarter.
Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo claimed that even after the break of the 112 level, the greenback did not show any strong upward momentum. In accordance to this, after the weak data raised concerns about falling inflation and lackluster growth, long-dated United States Treasury bonds yields dropped to seven-month lows and the yield curve between five-year notes and 30-year bonds narrowed to its flattest level since 2007.
United States 10-year Treasury yields were at 2.138% in Asian trading, a little changed from a U.S. close on Monday of 2.137%.