©Reuters. FILE PHOTO: US dollar bills
By Gertrude Chavez-Dreyfuss
NEW YORK, April 18 (Reuters) – The dollar rose to a two-year high on Monday in a volatile and low-volume trading session, in line with rising U.S. Treasury yields as investors they were bracing for multiple half-percentage-point rate hikes from the Federal Reserve this year.
* Volume was thin as markets in Hong Kong, Europe, Australia and New Zealand were closed for Easter Monday.
* The interest rate futures market in the United States has discounted a 96% probability of a 50 basis point hike at the Fed’s monetary policy meeting next month, and of about 215 points accumulated in 2022 .
* The US currency also hit a two-decade high against the yen at 126.98 yen, highlighting the contrast between Tokyo’s ultra-easy monetary policy and the Fed’s aggressive approach.
* The 10-year US Treasury yield, meanwhile, hit a three-year high of 2.884%.
* The , a gauge of the greenback’s value against six currencies, rose to 100.86, a two-year high, before trading 0.3% higher at 100.77.
* “There is history that when the Fed plans hikes and monetary tightening, the dollar ends up losing during those cycles, but at this time there is little optimism that could make the dollar fall,” said Juan Pérez, director of foreign exchange operations at Monex USA in Washington.
* The yen, meanwhile, moved off 20-year lows earlier after both Bank of Japan Governor Haruhiko Kuroda and Finance Minister Shunichi Suzuki expressed concern and caused it to bounce to 126.25. However, the rally was short-lived, with the coin shedding 0.3% at 126.93 yen.
* The euro, weighed down by a lack of clarity on when rates will rise, was down 0.3% at $1.0782, just above last week’s low of $1.0758, a level not seen since April 2020.
(Reporting by Vidya RanganathanEdited in Spanish by Javier López de Lérida)