US Dollar and US Treasuries: Slightly Weaker Early on May 11


May. 11 2017, Updated 8:20 a.m. ET

US dollar

After regaining strength and gaining for three consecutive trading days, the US dollar is slightly weaker in the early hours on May 11. Increased risk appetite helped the US dollar rally this week.

The US dollar was stable on Wednesday amid mixed sentiment. Increasing expectations of an interest rate hike by Fed in June are supporting the US dollar. On the other hand, the sentiment was dented by the dismissal of FBI Director James Comey. He mishandled the investigation into Hillary Clinton’s private email server. President Trump firing Comey decreased the bullish momentum in the US dollar.

The market is looking forward to the release of the US PPI (producer price index) at 8:30 AM EST today. The market expects the PPI to rise 0.2% in April. At 5:25 AM EST on May 10, the US Dollar Index was trading at 99.59—a fall of ~0.08%

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US Treasury yields

After gaining last week and moving higher in the first three trading days this week, US Treasury yields are weaker in the early hours on May 11. US Treasury bonds lost strength after Emmanuel Macron’s victory in France’s presidential election. His win improved global sentiment. US Treasury yields, which move opposite to bond prices, rose. With new Treasury bonds worth $189 billion scheduled to auction this week, the increased supply of bonds are expected to weigh on bond prices and support Treasury yields. However, softer-than-expected demand decreased the momentum in Treasury yields.

At 5:35 AM EST on May 10:

  • The ten-year Treasury yield was trading at 2.394—a fall of ~0.65%.
  • The 30-year Treasury yield was trading at 3.030—a fall of ~0.38%.
  • The five-year Treasury yield was trading at 1.926—a fall of ~0.6%.
  • The two-year Treasury yield was trading at 1.355—a fall of ~0.01%.

The iShares 20+ Year Treasury Bond ETF (TLT) and ProShares UltraPro Short 20+ Year Treasury ETF (TTT) fell 0.39% and 0.12%, respectively. The ProShares UltraShort 20+ Year Treasury ETF (TBT) rose 0.26% on May 10.


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