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US Dollar Index and Government Bonds Are Weak

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US Dollar Index

The US Dollar Index started this week on a weaker note and declined in the first three trading days of the week. Maintaining the weakness, the US Dollar Index started Thursday on a weaker note. The US Dollar Index was trading with weakness at three-week low price levels in the early hours.

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Market sentiment

Ongoing trade war concerns between the US and its allies are weighing on the US Dollar Index in the early hours on Thursday. The US dollar is cautious ahead of the upcoming G7 summit in Canada. The summit will focus on the global economy and US trade policy. The G7 summit gained importance after President Trump imposed tariffs of 25% and 10%, respectively, on steel and aluminum imports from Canada, the European Union, and Mexico. The market is looking forward to the release of initial jobless claims data. The data are scheduled to be released at 8:30 AM EST today.

At 6:05 AM EST on June 7, the US Dollar Index was trading at 93.34—a drop of 0.34%.

US Treasury yields

US government bonds are lower in the early hours on Thursday amid increased expectations of higher interest rates. The Treasury yields move opposite to bond prices and were trading higher in the early hours. The Treasury yields are also supported by the European Central Bank’s decision to discuss ending the monetary stimulus.

Below are the movements in Treasury yields as of 6:15 AM EST on June 7.

  • The ten-year Treasury yield was trading at 2.988—a gain of ~0.45%.
  • The 30-year Treasury yield was trading at 3.145—a gain of ~0.49%.
  • The five-year Treasury yield was trading at 2.823—a gain of ~0.28%.
  • The two-year Treasury yield was trading at 2.520—a gain of ~0.01%.

The iShares 20+ Year Treasury Bond (TLT) fell 0.81%, while the ProShares UltraShort 20+ Year Treasury (TBT) and the ProShares UltraPro Short 20+ Year Treasury (TTT) gained 1.6% and 2.5%, respectively, on Tuesday.

Next, we’ll discuss how commodities performed in the early hours on June 7.

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