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US Dollar Index Is Weak amid Geopolitical Tensions

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Sep. 6 2017, Updated 8:21 a.m. ET

US Dollar Index

After regaining strength last week, the US Dollar Index started this week on a weaker note. After falling on Tuesday, the US Dollar Index is weak in the early hours on Wednesday.

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Market sentiment

The market sentiment is weak amid geopolitical tensions and concerns about the Trump Administration. The market’s risk appetite fell and the demand for safe havens increased as North Korea tested a hydrogen bomb last weekend. This week, comments from Fed officials on low US inflation also weighed on the US Dollar Index. On the other hand, doubts about the Trump Administration’s ability to successfully implement pro-growth policies, including tax reforms and increased construction spending, are limiting the US dollar’s recovery.

At 5:30 AM EST today, the US Dollar Index is trading at 92.19—a fall of 0.06%.

US Treasury yields

After falling for two consecutive trading weeks, US Treasury yields were weaker in the first two trading days this week. US Treasuries fell on Tuesday amid increased demand for safe havens like bonds. Treasury yields, that move opposite to bonds, fell on Tuesday amid increased concerns about North Korea’s missile launches. The market is looking forward to the release of US trade balance and non-manufacturing PMI data that are scheduled to release today.

Movement in Treasury yields 

The movement in Treasury yields at 5:35 AM EST on September 6 was:

  • The ten-year Treasury yield was trading at 2.072—a fall of ~0.08%.
  • The 30-year Treasury yield was trading at 2.689— a fall of ~0.06%.
  • The five-year Treasury yield was trading at 1.651—a fall of ~0.10%.
  • The two-year Treasury yield was trading at 1.298—a gain of ~0.31%.

The iShares 20+ Year Treasury Bond ETF (TLT) rose 1.6%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) and the ProShares UltraShort 20+ Year Treasury ETF (TBT) fell 4.9% and 3.3%, respectively, on September 5.

In the next part, we’ll discuss how commodities are performing in the early hours on September 6.

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