US Dollar Index Fell, US Treasury Yields Regained Strength


Aug. 1 2017, Updated 8:26 a.m. ET

US Dollar Index

After falling for two consecutive trading weeks, the US Dollar Index started last week on a stable note but pulled back as the week progressed. In the week ending July 28, US Dollar Index fell in two of the five trading days.

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Market sentiment

After maintaining stability in the first two trading days last week, the US Dollar Index lost strength. The US dollar resumed its downfall after the release of the FOMC’s statement. 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 higher Treasury yields. After the brief rebound, the US dollar fell at the end of the week to fresh 13-month low levels due to political concerns in the US.

US Treasury yields

US Treasury yields started to regain strength last week after falling for two consecutive trading weeks. Fed Chair Janet Yellen’s dovish comments, weak economic data, and political concerns in the US pulled Treasury yields lower in the middle of July. The Treasury yields moved higher in the first two trading days last week but lost strength after the FOMC’s statement.

Movement in Treasury yields

  • The ten-year Treasury yield closed at 2.291—a rise of ~1.3%.
  • The 30-year Treasury yield closed at 2.894— a rise of ~2.0%.
  • The five-year Treasury yield closed at 1.834—a rise of ~0.44%.
  • The two-year Treasury yield closed at 1.351—a fall of ~1.3%.

The iShares 20+ Year Treasury Bond ETF (TLT) fell 1.1%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) rose 1.9% and 2.7%, respectively, in the week ending July 28.

In the next part, we’ll discuss how commodities performed last week.


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