US Dollar Index and Treasury Yields Are Stable



US Dollar Index

After gaining strength last week, the US Dollar Index maintained its strength and started this week on a stable note. It pulled back on Tuesday amid the decreased risk appetite ahead of the FOMC meeting. However, the US Dollar Index rose on Wednesday. In the early hours on Thursday, the US Dollar Index is trading with strength.

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Market sentiment

The market started this week with strong sentiment amid the improved global market sentiment. The expectations of a hawkish tone by the Fed in the FOMC meeting supported the dollar. After the release of the Fed’s statement on Wednesday, the US Dollar Index rose and closed the day with the highest daily rise in eight months. The Fed’s statement increased the expectations of one more interest rate hike by the end of 2017 and boosted the US dollar. The market is looking forward to the release of initial jobless claims data at 8:30 AM EST today.

At 6:50 AM EST on September 21, the US Dollar Index was trading at 92.40—a fall of 0.12%

US Treasury yields

US Treasury yields rose in the first three trading days this week amid the market’s increased risk appetite. The Fed’s announcement of a balance sheet reduction on Wednesday boosted Treasury yields. The Fed is going to start the $4.5 trillion balance sheet reduction in October at a pace of $10 billion per month. The pace will increase by $10 billion every three months. The announcement of the balance sheet’s gradual reduction strengthened Treasury yields.

Movement in Treasury yields 

The movement in Treasury yields at 6:55 AM EST on September 21 was:

  • The ten-year Treasury yield was trading at 2.278—a gain of ~0.1%.
  • The 30-year Treasury yield was trading at 2.817—a fall of ~0.19%.
  • The five-year Treasury yield was trading at 1.878—a fall of ~0.17%.
  • The two-year Treasury yield was trading at 1.439—a fall of ~0.24%.

The iShares 20+ Year Treasury Bond ETF (TLT) rose 0.07%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) fell 0.27% and 0.17%, respectively, on September 20.

In the next part, we’ll discuss how commodities performed in the early hours on September 21.


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