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US Dollar and Treasuries Yields Are Weaker in the Early Hours

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US dollar

After rising higher and pulling back on Wednesday, the US dollar is weaker in the early hours on April 27. Along with all major Wall Street indices, the US dollar pared its profits on Wednesday.

There was a sharp pullback in the US Dollar Index after Trump’s Administration released the new tax cut plan on April 26. The lack of details regarding the income range for new tax levels and other details kept the market guessing and spread weakness. The US dollar lost strength at the beginning of last weekend due to an increased risk appetite in the market amid Macron’s lead in the first round of France’s presidential election.

The market regained some strength due to expecting “massive” tax cuts from Trump’s Administration this week. However, the market was disappointed by the lack of details in the tax cut plan. At 6:00 AM EST on April 27, the US Dollar Index was trading at 99.01—a fall of ~0.04%.

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US Treasury yields

After gaining for two trading days, US Treasury yields pulled back on April 26 amid the vague tax cut plan. Treasuries carried the same weakness on April 27 and traded weaker in the early hours. The tax cut announcement increased demand for safe-haven assets like bonds and gold. Yields move in the opposite direction compared to bond prices. The market is looking forward to major US economic releases such as the goods trade balance, core durable goods orders, initial jobless claims, and pending home sales data scheduled to release today.

At 6:10 AM EST on April 27:

  • The ten-year Treasury yield was trading at 2.302—a fall of ~0.4%.
  • The 30-year Treasury yield was trading at 2.960—a fall of ~0.33%.
  • The five-year Treasury yield was trading at 1.834—a fall of ~0.39%.
  • The two-year Treasury yield was trading at 1.270—a fall of ~0.64%.

The iShares 20+ Year Treasury Bond ETF (TLT) rose 0.55%, while the ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) fell 1.7% and 1.0%, respectively, on April 26.

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