By: Barbara Zigah
The U.S. Dollar rose in early New York trading as U.S. Treasury bond yields continue to rise; 10-year instruments are currently yielding 3.25%, a 5-month high. Analysts are predicting that the greenback will continue to gain support through the conclusion of the 10-year auctions later today and tomorrow’s 30-year auctions.
Typically, however, bond auctions see little action as the year ends and liquidity all but dries up, but one currency strategist in France said that the thin market has been bringing in some investors who had previously shorted the dollar. As reported at 9:28 a.m. in New York, the U.S. Dollar was trading against the common currency Euro at $1.3277, while against the Japanese Yen, the Greenback was trading at 84.03 Yen.
On the whole, the common currency Euro continues to struggle as a result of persistent troubles in the Eurozone. In spite of the Irish government’s successful passing of the first round of voting on the proposed austerity budget, it’s still a fair way from getting the bailout funds necessary to keep their banking system and economy afloat. In the interim, investors continue to shy away from the Euro, as there remain persistent doubts that the E.U. can prevent the spread of the debt problems.