Economic news

Greenback and Aussie extend gains, while the euro comes down

The U.S. dollar grew on Monday due to some weakness of the euro amid a broad load volatility, which rises the bullish sentiment.

aussie - greenback higher 0403Photo: Reuters

As Fed still doesn’t hike the rates, higher U.S. bond yields in comparison with its peers mean that the advantage over interest rates lies flat with the the United States, especially versus the backdrop of diminishing fears about global outlook.

The difference between the 10-year benchmark yields in the United States and Germany increased to a nearly 3-month high (257 basis points against 240 basis points in the beginning of the year).

This increase in profitability occurred on market volatility fall, especially in foreign exchange markets, which have strengthened the strategy of a low-yielding currency trading, as the yen or the euro, and the buying of a high-yielding currency, such as the U.S. dollar.

One looked forward for some main central banks to raise interest rates this year, but because of the weak economic data these hopes melted away.

The U.S. dollar was traded at 111.96 yen in early trade and versus, but Japan’t yen dropped by 0.05 percent to 111.85 at 12.45 GMT. The dollar index was by 0.31 percent higher versus a basket of its peers at 96.68. The Aussie jumped by 0.17 percent to $0.709. The euro was lower on Monday by 0.28 percent at $1.1336.

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