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Dollar Hits 5-Month High As Yields Up Above 3%

Dollar rallies to five-month highs

Investing.com - The dollar rallied to hit five-month’s high overnight in Asia, and its momentum remained on Wednesday morning. Japan’s GDP figures missed expectation, ending its nine-quarter growth run.

The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 93.20, up 0.06% at 11:20AM ET (03:20 GMT).

The dollar index hit 93.32 on Tuesday night in Asia, the highest level this year. As the relations on the Korean peninsula improved and a full-blown trade war between the U.S. and China became less likely, investors turned to U.S. 10-year Treasury yields for cues.

The United States 10-Year yield further rose to 3.089% on early Wednesday morning, the highest level in seven years. A rise in yields widened interest rate gap between the U.S. and other developed economies, increasing the dollar’s appeal.

The USD/JPY pair slid 0.04% at 110.27. Japan’s GDP growth for the first quarter fell 0.6% compared to the same period last year, marking the end of economic growth for nine quarters.

The AUD/USD pair eased 0.05% at 0.7467. The Australian wage price index missed expectations with the quarter-on-quarter figure coming in at 0.5%, under the expected 0.6%, and the Aussie declined in early morning.

In China, the People's Bank of China set the set the reference rate for the yuan against the dollar, the mid-point from which the currency is allowed to trade, at 6.3745 versus the previous day's 6.3486. The USD/CNY pair gained 0.03% to trade at 6.3704.

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