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US Dollar Index and Treasury Yields Are Weak Early on October 26

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Oct. 26 2017, Published 9:04 a.m. ET

US Dollar Index

The US Dollar Index regained strength last week and started this week on a stronger note by gaining on Monday. However, the US Dollar Index lost its strength as the week progressed and fell in the next two trading days.

The US Dollar Index started Thursday on a stable note and traded with mixed sentiment in the early hours.

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Market sentiment

The optimism in the US economy increased this week amid the chances of one more interest rate hike and tax reform plans. The expectations of strong third-quarter earnings also supported the dollar at the beginning of the week. However, the US Dollar Index fell on Wednesday as the market sentiment weakened due to weak earnings reports. On the economic data front, according to the Census Bureau, September’s US core durable goods orders rose 0.7% and beat the market’s estimates. The US new home sales recorded 18.9% growth in September—better than the market’s expectation of a 0.9% fall.

The market is looking forward to the release of US economic data on October 26 including the jobs report, goods trade balance data, and pending home sales data. At 5:05 AM EST on October 26, 2017, the US Dollar Index was trading at 93.69—a fall of 0.02%.

US Treasury Yields

US Treasury yields started this week on a weaker note but regained strength as the week progressed. The Treasury yields moved higher on Tuesday and Wednesday amid the improved market sentiment. The stronger-than-expected core durable goods orders and new home sales pushed the yields higher on October 25. On Thursday, the Treasury yields opened the day lower amid a pullback in US markets.

Movement in Treasury yields

Below are the movements in Treasury yields as of 5:15 AM EST on October 26:

  • The ten-year Treasury yield was trading at 2.426—a fall of ~0.72%.
  • The 30-year Treasury yield was trading at 2.938—a fall of ~0.58%.
  • The five-year Treasury yield was trading at 2.046—a fall of ~0.91%.
  • The two-year Treasury yield was trading at 1.603—a fall of ~0.25%.

The iShares 20+ Year Treasury Bond (TLT) fell 0.48%. The ProShares UltraPro Short 20+ Year Treasury (TTT) rose 1.4% and the ProShares UltraShort 20+ Year Treasury (TBT) rose 0.97% on October 25.

In the next part of this series, we’ll discuss how commodities performed in the early hours on October 26.

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