Dollar hits one-year high as Treasury yields rise - REUTERS
OCTOBER 12, 2021
By Saikat Chatterjee, John McCrank
The dollar held near three-year highs versus the yen, which has fallen 4% versus the greenback in three weeks, on Tuesday as Treasury yields continued to rise.
“The primary driver of the move is the further rise that we’ve seen in U.S. Treasury yields - so it’s a fairly simple story of a widening rates differential ... adding to the attraction of the carry trade,” said Ray Attrill, head of foreign exchange strategy at National Australia Bank.
A Deutsche Bank monthly market sentiment survey this month noted that an overwhelming majority of respondents expect U.S. Treasury yields to rise from current levels.
Oil rose towards $84 a barrel, within sight of a three-year high, as a rebound in global demand after the worst of the COVID-19 pandemic caused price spikes and shortages in other energy sources. Coal has scaled record peaks and gas prices remain four times higher in Europe than at the start of 2021.
The commodity-linked Australian dollar was up 0.07% at $0.73515.
The ZEW indicator of economic sentiment in Germany slipped for the fifth month, the latest in a string of indicators showing supply bottlenecks holding back recovery in Europe’s largest economy.
The euro and the British pound were both down 0.14% versus the dollar, at $1.1537 and $1.3577 respectively.
In cryptocurrencies, bitcoin was down 1.41% at $56,676. Ether, the world’s second biggest cryptocurrency dropped 1.42% to $3,493.
Graphic: FX performance
Graphic: Graphic: World FX rates here
Reporting by John McCrank; additional reporting by Saikat Chatterjee in London; Editing by Kirsten Donovan and Bernadette Baum