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. 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 is trading with weakness in the early hours on July 27.
As the market expected, the FOMC didn’t change the interest rates. The market was waiting for the Fed’s comments about its plans to unwind its $4.5 trillion balance sheet. According to the Fed, balance sheet normalization will start “relatively soon.” In the previous FOMC statement in June, the Fed commented that the balance sheet reduction will start “this year.” With increased selling pressure, the US Dollar Index is marching toward 93. The US Dollar Index is trading at 93.59 at 7:15 AM EST today. The market is looking forward to durable goods orders and good trade balance data that will be released at 8:30 AM EST today.
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. Treasury yields pulled back after the release of the FOMC’s statement on Wednesday. Treasury yields are stable in the early hours on Thursday.
Movement in Treasury yields
- The ten-year Treasury yield closed at 2.293—a rise of ~0.46%.
- The 30-year Treasury yield closed at 2.898— a rise of ~0.23%.
- The five-year Treasury yield closed at 1.841—a rise of ~0.68%.
- The two-year Treasury yield closed at 1.359—a rise of ~0.6%.
The iShares 20+ Year Treasury Bond ETF (TLT) rose 0.16%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) fell 0.65% and 0.3%, respectively, on July 26.
In the next part, we’ll discuss how commodities are performing in the early hours on July 27.