Why Is the US Dollar Index Mixed?


Oct. 9 2017, Published 9:19 a.m. ET

US Dollar Index

After falling in August, the US Dollar Index regained strength in September and rose for four consecutive trading weeks. However, the US Dollar Index opened lower this week. The index was slightly weaker in the early hours on Monday.

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Market sentiment

The US Dollar Index moved higher last week amid the increased chances of one more interest rate hike in December and increased optimism about tax reform plans. However, the US Dollar Index pulled back on Friday due to weaker-than-expected US jobs data. According to the data released by the U.S. Bureau of Labor Statistics on October 6, the US non-farm payrolls fell by 33,000, while the market expected an increase in non-farm payrolls by 90,000. On Monday, renewed concerns about North Korea’s nuclear missile tests are weighing on the US Dollar Index.

At 6:45 AM EST on October 9, the US Dollar Index was trading at 93.70—a fall of 0.1%.

US Treasury yields

Amid the improved market sentiment, US Treasury yields moved higher for four consecutive trading weeks. The market’s increased risk appetite weighed on bonds last week and supported Treasury yields. Treasury yields move against bonds, which are considered as “safe havens.”

The following are US Treasury yields’ closing prices on October 6:

  • The ten-year Treasury yield closed at 2.361—a gain of ~0.31%.
  • The 30-year Treasury yield closed at 2.896—a gain of ~0.34%.
  • The five-year Treasury yield closed at 1.958—a gain of ~0.52%.
  • The two-year Treasury yield closed at 1.508—a gain of ~0.26%.

The iShares 20+ Year Treasury Bond ETF (TLT) fell 0.28%. The ProShares UltraPro Short 20+ Year Treasury ETF (TTT) rose 0.72% and the ProShares UltraShort 20+ Year Treasury ETF (TBT) rose 0.86% on October 6.

In the next part, we’ll discuss how commodities performed in the early hours on October 9.


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