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Dollar Is Stable, Treasury Yields Are Weaker in the Early Hours

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Aug. 18 2020, Updated 10:20 a.m. ET

US dollar

After falling for four consecutive trading weeks, the US dollar is stable in the early hours. Supporting US economic data improved the sentiment.

The US dollar is expected to be volatile today amid Emmanuel Macron’s victory in France’s presidential election. The rise in non-farm payrolls along with a fall in the unemployment rate to 4.4% supports the US dollar. The market is expecting an interest rate hike by the Fed in its June interest rate meeting. The Fed’s latest statement improved the market sentiment. The Fed downplayed slow economic growth in the first quarter and focused on the labor market’s strength. The market is looking forward to US retail sales and core inflation data, scheduled to release this week, to gauge the US economy’s strength.

At 5:45 AM EST on May 8, the US Dollar Index was trading at 98.91—a gain of ~0.26%.

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US Treasury yields

US Treasury yields fell on Friday despite higher US non-farm payrolls and the lower US unemployment rate as the market waited for France’s presidential election. US Treasury yields are weaker in the early hours on May 8 as markets digest Macron’s win. FOMC members Bullard and Mester are scheduled to speak at 8:35 AM and 8:45 AM EST today.

At 6:00 AM EST on May 8:

  • The ten-year Treasury yield was trading at 2.338—a fall of ~0.6%.
  • The 30-year Treasury yield was trading at 2.973—a fall of ~0.54%.
  • The five-year Treasury yield was trading at 1.870—a fall of ~0.69%.
  • The two-year Treasury yield was trading at 1.314—a fall of ~0.28%.

The iShares 20+ Year Treasury Bond ETF (TLT) rose 0.09%, while the ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) fell 0.3% and 0.26%, respectively, on May 5.

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