uploads/2017/08/Treasury.png

US Dollar Index and Treasury Yields Are Weak in the Early Hours

By

Updated

US Dollar Index

After losing strength last week, the US Dollar Index started this week on a weaker note by opening lower on Monday. The US Dollar Index is trading with weakness in the early hours on August 28.

Article continues below advertisement

Market sentiment

On Monday, the market sentiment on the US Dollar Index is weak for several reasons. The euro’s strength, the change in US interest rate hike expectations, and ongoing political tensions in the US are the major reasons behind the US Dollar Index’s weakness. The euro gained strength last week after European Central Bank President Mario Draghi’s speech at the Jackson Hole symposium. A lack of comments by Fed Chair Janet Yellen also pushed the euro higher. Increased expectations of no more interest rate hikes in 2017 weighed on the dollar.

Concerns about the successful implementation of tax reforms and the infrastructure spending increase announced by President Trump also weighed on the dollar. At 6:15 AM EST today, the US Dollar Index is trading at 92.45—a fall of 0.31%.

US Treasury yields

After falling last week, the US Treasury yields are slightly weaker in the early hours on Monday. A lack of comments made by Yellen on the interest rate policy at the Jackson Hole symposium was taken as a dovish tone. The tone’s strength caused bonds and yields to fall—they move opposite to bonds’ movement. The market is looking forward to the release of US goods trade balance data that are scheduled to release at 8:30 AM EST.

Movement in Treasury yields 

The movement in Treasury yields at 6:20 AM EST on August 28 was:

  • The ten-year Treasury yield was trading at 2.169—a fall of ~0.08%.
  • The 30-year Treasury yield was trading at 2.751— a fall of ~0.05%.
  • The five-year Treasury yield was trading at 1.760—a gain of ~0.11%.
  • The two-year Treasury yield was trading at 1.334—a fall of ~0.04%.

The iShares 20+ Year Treasury Bond ETF (TLT) rose 0.39%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) fell 0.84% and 1.2%, respectively, on August 25.

In the next part, we’ll discuss how commodities are performing in the early hours on August 28.

Advertisement

More From Market Realist