© Reuters.
Por Geoffrey Smith
Investing.com – The dollar gains positions at the start of trading in Europe on Tuesday, fueled by inflation concerns that pushed the yield on 10-year U.S. Treasuries to more than two-year highs. .
The 10-year US government bond yield has risen to 1.86%, a level it last reached when virtually no one apart from China had heard of Covid-19. The benchmark two-year bond yield, which is more sensitive to short-term interest rate expectations, has also broken above 1% for the first time in two years.
At 9:00 AM ET, the {{Dollar Index}}, which tracks the dollar against a basket of six other majors, was up 0.1% at 95.287.
The dollar briefly breaks above the 115 yen level again after Bank of Japan Governor Haruhiko Kuroda said the bank had not discussed raising interest rates, as reported by the media last week. despite the bank slightly raising its inflation outlook to 1.1% for the next two years. This figure remains well below the bank’s 2% target.
“In the immediate future, we think there is very little chance of the Bank of Japan adjusting interest rates,” says Shreena Patel, an analyst at Oxford Economics. “We think the yen will remain weak this year, but the room for further depreciation is limited.”
The pair stands at the 114.79 level, up 0.2% on the day as a whole.
The dollar hit a five-year high against the yen earlier this month, on expectations that the Federal Reserve will tighten monetary policy much more than the Bank of Japan this year. The first meeting of the year will be held next week, and policymakers have already entered their usual period of silence before it.
In Europe, the pound is flat against the dollar at $1.3639, but rises against the euro despite figures indicating that unemployment fell less than expected between September and November. Analysts focus on the sharp downward revision in the number of jobless claims in November and the larger-than-expected decline in December, suggesting that the UK economy has weathered the first part of the wave. winter of Covid-19 quite comfortably.
The also hardly changes against the dollar, and remains at 1.1402 dollars, before the publication of the economic confidence index for Germany in January.
In emerging markets, the ruble is weakening again on growing fears that President Vladimir Putin will once again send his tanks across the Ukrainian border. The pair is up 0.4% to the 76.40 level, although the move has been largely in line with other emerging market currencies as the dollar strengthens again.
The ruble often reacts badly to geopolitical shocks emanating from Russia, but the country’s foreign exchange reserves are at an unprecedented level, while its public debt is low and its companies’ foreign-exchange indebtedness has fallen by almost half. since the last time it invaded Ukraine in 2014. Oil and other commodity prices remain high, so the ruble has several pillars supporting it.
