Dollar Steady on US Treasuries Yield

The U.S. Dollar began the trading week in Asia by edging broadly higher against its major peers. The greenback gained support from rising yields for 10-year U.S. Treasuries on growing investors’ expectations of a soon-to-be scaled back quantitative easing program by the Federal Reserve Bank; on Friday, those yields edged up to 2.86%, a fresh 2-year high. Recently improved economic data, which included an unexpected decline in weekly claims for unemployment benefits, have given market players reason to hope that the Fed will curtail the current $85 billion in monthly asset purchases by as much as $10 billion as soon as next month. The release later this week of July’s Fed meeting minutes could also give the U.S. Dollar some support provided the minutes suggest that the Fed is committed to reining in the QE scheme.

The U.S. Dollar Index traded at 81.333 .DXY, a gain of 0.1% and holding steady above August’s low price of 80.868 .DXY. The USD/JPY pair traded at 97.76 Yen, a gain of 0.2% while the EUR/USD pair steadied at $1.3328, pulling back from the Friday’s high of $1.3380. Analysts say that while the Euro had received support from improved economic data their expectations are that the 3rd quarter’s GDP figures are likely to worsen with demand for the Euro eroding.