The U.S. dollar held firm on Tuesday as traders positioned for a more hawkish Federal Reserve, despite oil prices inching lower on ebbing Gulf tensions. The yen, meanwhile, flirted with a four-decade low.
Market Analysis
U.S. Treasury yields remained elevated after a jump in the previous session, with those on interest-rate-sensitive 2-year notes hovering near a 16-month high as traders braced for the prospect of rate hikes later this year. Fed funds futures are pricing in 75% odds of a rate hike by September.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was a shade higher at 101.06, not far from the one-year high of 101.12 hit late last week. The euro last traded at $1.1422, hovering near a three-month low after European Central Bank President Christine Lagarde played down second-round inflation worries.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
