Prime News: Dollar Strengthens, Supported by Rising U.S. Yields

The dollar climbed versus the yen on Friday and set a new four-month peak, supported by a further rise in U.S. Treasury.

U.S. benchmark 10-year yields reached a high of 3.128 percent on Friday, the highest in nearly seven years.

The rising yields reflect continued optimism about the U.S. economy and expectations of growing price pressures, reinforcing expectations that the Federal Reserve would hike borrowing rates at least two more times this year and lifting the greenback.

The dollar’s index against a basket of six major currencies was at 93.467, trading within sight of a five-month peak of 93.632 set earlier this week.

The greenback hit a peak of 111.005 yen, its strongest level since Jan. 23, and last changed hands at 110.92 yen, up 0.1 percent on the day.

The euro climbed 0.1 percent to $1.1806. On Wednesday it had set a five-month low of $1.1763 as it came under pressure on concerns about the demands of populist parties likely to form Italy’s next government.

The common currency has tumbled six cents from more than $1.24 in about a month, after a huge dollar rally. Investors are betting U.S. interest rates will need to rise further, while other central banks are postponing monetary tightening. That has forced investors who took big positions against the dollar anticipating a fall in 2018 to unwind and cover their positions, pushing the greenback even higher.

The material has been provided by InstaForex Company – www.instaforex.com

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