Dollar advances as Treasury Yields flirt with 3%

Cornelia Mascio
Aprile 24, 2018

Gold prices slipped to their lowest level in almost two weeks in range-bound trade on Monday, as the dollar rose on the back of climbing US Treasury yields and as global political concerns eased.

The greenback strengthened against major peers as the yield on the US 10-year note hit 2.99% for the first time since 2014 before paring the increase. The pound joined major currencies retreating against the greenback, as UK Prime Minister Theresa May battled to avert a cabinet revolt over Brexit.

Gold prices also came under downward pressure from an improvement in the geopolitical environment, with the U.S. Treasury Secretary cautiously optimistic on his negotiations with China, North Korea freezing its nuclear testing, and Washington extending its deadline for sanctions against Russia's Rusal, said OCBC analyst Barnabas Gan.

The 60-day correlation between the Bloomberg Dollar Spot Index and benchmark Treasury 10-year yields has turned positive again, after dipping into negative territory during the past few months for the first time since 2016.

Elsewhere, aluminum plunged as much as 9.4% after the U.S. Treasury said it would provide sanctions relief to Rusal if Oleg Deripaska relinquished control, according to statement on Monday.

Later this week: GDP and jobless claims.

Earnings season continues. Among those reporting: Amazon.com, Samsung and Credit Suisse.

Bank of Japan announces its latest policy decision Friday and releases a quarterly outlook report. The MSCI World Index of developed countries declined 0.2% to the lowest in more than a week. The MSCI Asia Pacific Index dipped 0.6% to the lowest in more than two weeks.

Among other precious metals, spot silver fell 0.1 per cent to US$17.09 per ounce.

Futures on the S&P 500 Index advanced 0.5 percent, the biggest gain in a week. The British pound fell 0.3% to $1.3961, reaching the weakest in more than five weeks on its fifth consecutive decline.

The Japanese yen fell 0.1 percent to 108.82 per dollar, hitting the weakest in nearly 11 weeks with its fifth straight decline. Germany's 10-year yield climbed four basis points to 0.63%, the highest in more than six weeks.

West Texas Intermediate crude increased 0.6 percent to $69.08 a barrel, the highest in more than three years.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE