Dollar Tries to Claw Higher on Treasury Yields
The US Dollar had firmed during London trading but remains just off the 6-month peak struck last week as FX traders await news on the US economy which could prove steady growth through the second quarter. Yields on 2-year Treasury instruments were up by about 20 bp this past week, pushing those yields close to last month's high of 2.59%, the highest yield in ten years. Analysts point to a correlation between the US Dollar's strength and the yields on short-dated Treasuries, which FX traders have recently responded to by buying the Dollar, especially against emerging market currencies and the common currency Euro.
As reported as 10:49 am (BST) in London, the EUR/USD was trading at $1.1699, up 0.02%; the pair has ranged from a session trough of $1.16835 to a peak of $1.17167. The GBP/USD was trading at $1.3382, up 0.53% and off the session high of $1.3385 while the low is at $1.3302.
Markit PMIs Eyed
Markets' attention will turn to the US later today where the Markit PMI reports will be released; economists are forecasting a rise in the non-manufacturing PMI report for May, a flat reading for the services sector PMI and a drop in composite survey. Markit released its PMI services report for the UK earlier today and, at a reading of 54, was better than expected. The Eurozone's PMI services report, meanwhile, just missed the mark with a reading of 53.8 and a flat composite reading.