US Dollar Index
After falling for two consecutive trading weeks, the US Dollar Index started this week on a stable note by moving higher on Monday. The US dollar maintained stability in the first two trading days of the week but fell on Wednesday after the FOMC’s statement. The US dollar regained some strength on July 27. It was stable in the early hours on Friday.
This week, the US Dollar Index fell to 13-month low levels after the Fed announced that it would start the balance sheet normalization “relatively soon.” The US Dollar Index rebounded from the 13-month low on Thursday amid a rise in Treasury yields. The market is looking forward to the release of US GDP data. The U.S. Bureau of Economic Analysis will release the data at 8:30 AM EST. The US Dollar Index is on track to close this week lower—the third consecutive weekly drop.
US Treasury yields
US Treasury yields moved lower for two consecutive trading weeks amid dovish comments by Fed Chair Janet Yellen, weak economic data, and political concerns in the US. Treasury yields moved higher in the first two trading days this week amid regained strength. After pulling back on Wednesday amid the FOMC’s statement, the yields moved higher on Thursday amid upbeat US durable goods and trade data. Treasury yields are higher in the early hours on Friday.
Movement in Treasury yields
- The ten-year Treasury yield closed at 2.332—a rise of ~0.94%.
- The 30-year Treasury yield closed at 2.935— a rise of ~0.28%.
- The five-year Treasury yield closed at 1.868—a rise of ~1.3%.
- The two-year Treasury yield closed at 1.371—a rise of ~0.88%.
The iShares 20+ Year Treasury Bond ETF (TLT) fell 0.49%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) rose 1.3% and 0.96%, respectively, on July 27.
In the next part, we’ll discuss how commodities are performing in the early hours on July 28.