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US dollar is weak, yield is not

US dollar is weakening against major counterparts steadily as Dollar index failed to break above 97.7 area. Fall in US dollar have been significantly large. After Friday's stronger than expected jobs report provided the necessary boost to the index, Monday it faced sharp loss.

However, yields in US especially in the shorter end has been steady performer so far.

  • Before the retail sales data was released 2 year yield was trading around 0.725%, a level not seen since December last year. From mid-May yields in short end are rising steadily from 0.53% to 0.73% as of today.

It still looks like that FOMC will be leaving rates unchanged this month on 17th, however possibilities of a hike can't be completely wiped out. Most market participants think September to be the most likely month for FED to deliver rate hike so far.

Dollar bears are likely to face tough challenge if short term yields in US keep rising steadily.

Dollar index is currently trading at 95.3, up o.7% for the day.

  • Market Data
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