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

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US Dollar Index

After a brief pullback last week, the US Dollar Index started this week on a stronger note. After rising in the first two trading days of the week, the US Dollar Index pulled back for two days. On Friday, the US Dollar Index started the day with positive sentiment and traded with strength in the early hours.

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Market sentiment

For the US dollar, the market sentiment is strong this week amid improved confidence in the economic stability and third quarter performance. However, the US dollar pulled back on Thursday as Wall Street corrected from record highs amid the sell-off in IT stocks. The US Dollar Index regained strength on Friday amid the Senate’s budget approval. The budget approval increased the optimism about the execution of proposed tax cut plans and improved the market sentiment.

The market is looking forward for the release of US economic data on Friday like existing home sales data and the ECRI weekly index. At 7:05 AM EST on October 20, 2017, the US Dollar Index was trading at 93.48—a rise of 0.23%.

US Treasury yields

Amid the improved market sentiment, US Treasury yields started this week stronger and moved higher as the week progressed. The bonds moved higher on October 19 amid the market’s decreased risk appetite and pullback in stocks. The yields, which move opposite to bonds, fell in response to the bonds’ movement. However, the market’s risk appetite improved and the yields moved higher on Friday following reports that the Senate passed the budget.

Movement in Treasury yields

Below are the movements in Treasury yields as of 7:10 AM EST on October 20:

  • The ten-year Treasury yield was trading at 2.365—a rise of ~2%.
  • The 30-year Treasury yield was trading at 2.873—a rise of ~1.6%.
  • The five-year Treasury yield was trading at 2.003—a rise of ~1.4%.
  • The two-year Treasury yield was trading at 1.568—a rise of ~0.8%.

The iShares 20+ Year Treasury Bond (TLT) rose 0.18%. The ProShares UltraPro Short 20+ Year Treasury (TTT) fell 0.96% and the ProShares UltraShort 20+ Year Treasury (TBT) fell 0.37% on October 20.

In the next part of this series, we’ll discuss how commodities performed in the early hours on October 20.

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