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

US Dollar Index

The US Dollar Index traded with strength for three weeks but pulled back this week. The US Dollar Index fell in the first two trading days this week and started Wednesday on a weaker note. In the early hours on December 20, the US Dollar Index is trading with weakness below the opening prices.

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

Market sentiment

The market sentiment on the US Dollar Index is strong this week amid increased optimism about the US tax reform bill. However, caution ahead of voting on tax cut bill is limiting the US Dollar Index’s upward movement. Stronger-than-expected housing data were also released. According to the Department of Commerce, US housing starts rose 3.3% in November. It’s better than the expected fall of 3.2%. Despite positive sentiment from the tax cut bill and housing data, the US Dollar Index is weak amid dovish comments made by Fed officials Kaplan and Kashkari on Tuesday.

At 4:20 AM EST on December 20, the US Dollar Index was trading at 93.41—a fall of 0.04%.

US Treasury yields

After losing strength last week, US Treasury yields regained strength this week and rose in the first two trading days. On Tuesday, amid strong housing data, Treasury yields rose to seven-week high price levels. On Wednesday, Treasury yields started the day on a weaker note amid increased caution in the market ahead of the vote on the US tax cut bill.

Below are the movements in Treasury yields as of 4:25 AM EST on December 20:

  • The ten-year Treasury yield was trading at 2.454—a fall of ~0.31%.
  • The 30-year Treasury yield was trading at 2.816—a fall of ~0.25%.
  • The five-year Treasury yield was trading at 2.215—a fall of ~0.24%.
  • The two-year Treasury yield was trading at 1.857—a fall of ~0.02%.

The iShares 20+ Year Treasury Bond (TLT) fell 1.3%. The ProShares UltraPro Short 20+ Year Treasury (TTT) rose 3.7% and the ProShares UltraShort 20+ Year Treasury (TBT) rose 2.5% on December 19.

Next, we’ll discuss how commodities performed in the early hours on December 20.