The U.S. dollar, on Monday, December 12, pulled back against the euro and British pound Sterling. The ICE Dollar index DXY, -0.67% which measures the greenback against a basket of major rivals, fell 0.6% to 100.97 late Monday in New York from 101.59 late Friday in New York.
The dollar USDJPY, -0.06% rose as high as ¥116.13, its strongest in 10 months in early Asia trade, though it subsequently reversed to trade at ¥115.09 late Monday in New York, slightly down from ¥115.29 late Friday in New York.
The spike in the dollar-yen pair was driven by rising Treasury yields resulting in a wider spread between Japanese yields sent the yen tumbling to a 10-month low. 10-year Treasury yield TMUBMUSD10Y, +0.27% earlier touched 2.5% on Monday, its highest level in nearly two years.
The spread between U.S. and Japanese 10-year bond yields reached 143 basis points, the widest in five years.
The greenback weakened sharply against resources currencies largely thanks to a jump in oil prices that benefited currencies of countries that export commodities.
The focus for investors is on the Federal Open Market Committee meeting that ends Wednesday, during which the U.S. central bank is expected to raise rates.
The dollar has surged since the U.S. election amid expectations that bigger fiscal deficits under a Trump administration would lead to a more aggressive tightening of monetary policy by the Fed.
Meanwhile, the euro EURUSD, +0.0188% rose to $1.0637 late Monday in New York versus $1.0564.
