FOREX-Dollar set for back-to-back weekly losses as Treasury yields retreat

  • Reuters
  • Stock Market News
FOREX-Dollar set for back-to-back weekly losses as Treasury yields retreat
Credit: © Reuters.

* Greenback set for 0.6% drop this week after hitting 1-month low

* Benchmark yield fell most in 5 months despite strong U.S. data

* Federal Reserve officials continue to bang lower-for-longer drum

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Kevin Buckland

TOKYO, April 16 (Reuters) - The dollar headed for its worst back-to-back weekly drop this year amid a continued retreat in Treasury yields from more-than-one-year highs as investors increasingly bought into the Federal Reserve's insistence of continued monetary support.

The benchmark 10-year Treasury yield US10YT=RR dipped to a one-month low of 1.528% overnight, from as high as 1.776% at the end of last month, even in the face of Thursday's stronger-than-expected retail sales and employment data. Francisco Fed President Mary Daly said the same day that the U.S. economy is still far from making "substantial progress" toward the central bank's goals of 2% inflation and full employment, the bar the Fed has set for beginning to consider reducing its support for the economy. dollar index =USD , which tracks the greenback against six major peers, dipped to an almost-one-month low of 91.487 overnight before recovering somewhat to 91.678 early in the Asian session.

It's set for a 0.6% decline for the week, extending the 0.9% slide from the previous week.

The gauge, also known as the DXY, surged with Treasury yields to an almost-five-month high at 93.439 on the final day of March, on bets that massive fiscal spending coupled with continued monetary easing will spur faster U.S. economic growth and higher inflation.

But bond and foreign-exchange markets now seem willing to give the Fed the benefit of the doubt that inflation pressure will be transitory and monetary stimulus will remain in place for years to come.

The dollar is "still struggling to find its feet in April, even though the U.S. macro outperformance narrative could not be more propitious," Westpac strategists wrote in a research note.

"The DXY is trading like its topping out now, sooner than (we) expected."

Retail sales increased 9.8% last month, beating economists' expectations for a 5.9% increase, while first-time claims for unemployment benefits tumbled last week to the lowest level in more than a year, separate reports showed Thursday. dollar traded at 108.68 yen JPY=EBS , heading for a 0.9% loss for the week, about the same as the previous week.

The euro EUR=EBS changed hands at $1.1964, set for a 0.5% weekly advance, adding to the previous period's 1.3% surge.

In cryptocurrencies, Bitcoin BTC=BTSP stood around $63,478, near the record high of $64,895 reached on Wednesday, when cryptocurrency platform Coinbase COIN.O made its debut in Nasdaq in a direct listing. Russian rouble tumbled on Thursday, at one point losing 2% to the dollar in volatile trade and hitting a more than five-month low versus the euro as the White House announced new sanctions targeting Russia's sovereign debt.

U.S. President Joe Biden on Thursday authorized the move to punish Moscow for interfering in the 2020 U.S. election, allegations Russia denies. ========================================================

Currency bid prices at 055 GMT Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.1959

$1.1966

-0.05%

-2.11%

+1.1975

+1.1959 Dollar/Yen

JPY=D3

108.6970

108.7050

-0.01%

+5.23%

+108.7370 +108.6900 Euro/Yen

EURJPY=

130.00

130.15

-0.12%

+2.43%

+130.1800 +129.9800 Dollar/Swiss

CHF=EBS

0.9226

0.9221

+0.06%

+4.28%

+0.9226

+0.9220 Sterling/Dollar GBP=D3

1.3766

1.3781

-0.07%

+0.80%

+1.3785

+1.3770 Dollar/Canadian CAD=D3

1.2553

1.2548

+0.06%

-1.41%

+1.2554

+1.2536 Aussie/Dollar

AUD=D3

0.7740

0.7748

-0.06%

+0.66%

+0.7754

+0.7741 NZ

NZD=D3

0.7164

0.7171

-0.08%

-0.22%

+0.7177

+0.7165 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates

https://tmsnrt.rs/2RBWI5E

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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