Forex

Dollar was pulled down by the weakening of Treasury yields; Sterling rises

Dollar was pulled down

The U.S. dollar was slightly lower against its major opposing currencies on Tuesday’s trade driven by the decline of Treasury yields. Sterling edged higher when U.K. Prime Minister Theresa May ordered a snap election.

The dollar index in the United States was 0.45 percent lower at 99.842. It hits its lowest by 99.799 last March 29. Treasury yields in the country dropped due to concerns on the first round of French elections this coming weekend and current geopolitical crisis strengthened the demand for safe haven assets.

Investors are keeping an eye on the Japan-United States talks for indications of directions the trade policy could take under Trumps administration given that he pledged on a protectionist platform and criticized other countries on manipulating their own currency.

Sterling had reached its best level since last December by rising more than 1.5 percent at $1.2753 when U.K. Prime Minster Theresa May made an unexpected call for an early snap election for June 8. Markets however are in favor with the movement due to it strengthens the party’s majority in the government. Polls have shown that May could possibly win the election.

Another factor that made the dollar deteriorate against other currencies, especially the yen, are the on-going concerns at North Korea and the French presidential polls. The Japanese yen is considered as a safe-haven capital in time of economic and political stress, the currency has been rising last two weeks.

However, the dollar gained momentum over the yen overnight following the remarks by U.S. Treasury Secretary Steven Mnuchin, which was perceived as favoring the lasting strength of the dollar.

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