LONDON/TOKYO, 30th May, 2024 (WAM) -- The dollar held steady on Thursday after rising to a two-week high as a rout in U.S. Treasuries pushed up yields, boosting the currency's allure, Reuters reported.
The index tracking the U.S. currency against its major peers climbed to 105.18 overnight, the highest since 14th May, and was slightly lower at 105.05 in early European trading.
A two-day, 15-basis point jump above 4.6 percent for long-term Treasury yields helped push the dollar higher. The rise in yields, which move inversely to prices, has been driven by a spate of stronger-than-expected data, tough words from Federal Reserve officials, and a run of poorly received bond auctions.
The euro suffered as U.S. yields rose, dropping 0.5 percent on Wednesday to touch a two-week low of US$1.0789 overnight before bouncing somewhat to US$1.0806.
The yen was the biggest mover on Thursday morning in Europe, with the dollar down 0.4 percent against the Japanese currency at 157.08 after hitting a one-month high of 157.72 the previous day.
Sterling, which hit a more-than one-month high earlier this week, also fell 0.5 percent on Wednesday and last traded at US$1.2704, little changed on the day.
Expectations for Federal Reserve interest rate reductions this year have been pared back amid signs of sticky inflation, most recently with a surprise uptick in consumer sentiment in data on Tuesday.
Revised U.S. GDP figures are due later in the day, followed on Friday by the main macro event of this week, the release of the Personal Consumption Expenditures price index - the Fed's preferred measure of inflation.
Price data for the euro zone is also due on Friday, following a stronger-than-expected April inflation reading for Germany on Wednesday.