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US Dollar and Treasury Yields Focus on the Fed’s Meeting

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Jul. 25 2017, Updated 9:54 a.m. ET

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. In the early hours on Tuesday, the US Dollar Index is trading with mixed sentiment.

The dollar traded at 13-month low price levels in the early hours. The market is looking forward to the outcome of the Fed’s two-day meeting that started today. Even though no interest rate change is expected, the market is looking forward to details on the reduction of the Fed’s $4.5 trillion balance sheet. The market is also looking for clues on the timing of the next interest rate hike. On the other hand, the market is waiting for the release of the US Conference Board’s consumer confidence reading, which indicates the level of consumer confidence in economic activity. June’s reading was 118.9. The market expects a reading of 116.5 for July. The reading will be released at 10:00 AM EST today.

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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 regained strength this week and moved higher in the early hours on July 25.

Movement in Treasury yields

  • The ten-year Treasury yield closed at 2.277—a rise of ~1.0%.
  • The 30-year Treasury yield closed at 2.853— a rise of ~0.7%.
  • The five-year Treasury yield closed at 1.845—a rise of ~1.3%.
  • The two-year Treasury yield closed at 1.377—a rise of ~0.92%.

The iShares 20+ Year Treasury Bond ETF (TLT) fell 0.39%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) rose 1.4% and 0.79%, respectively, on July 24.

In the next part, we’ll discuss how commodities are performing in the early hours on July 25.

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