The United States of America dollar on Thursday, April 26, held near a 3-1/2-month high against a basket of currencies .DXY, supported by the 10-year Treasury benchmark yield US10YT=RR breaching the three percent threshold for the first time in four years.
The dollar index , which measures the greenback against a basket of currencies, was at 91.102 after rising as far as 91.261 in the previous session, its highest since Jan. 12.
The rise in yields, driven by worries about the growing supply of U.S. government debt and inflationary pressures from increasing oil prices, has caused U.S.-Japan and U.S.-German yield differentials to widen further in the dollar’s favor, leaving the yen and the euro lower.
“As markets become less confident about the European growth outlook, at the same time as looking for the U.S. to benefit from late-cycle fiscal easing, I shouldn’t really be surprised if we reverse pretty much all of January’s euro/dollar spike,” said Kit Juckes, chief FX strategist at Societe Generale.
Against the yen, the dollar set a 2-1/2-month high of 109.49 yen but later eased to 109.305 yen JPY=, down 0.1 percent, Reuters reports.
The dollar also fell marginally against the Australian AUD= and Canadian CAD= dollars after its recent gains.
