Dollar Set to Snap Two-Day Losing Streak as Rates Find Footing
The dollar rose against a basket of major currencies Wednesday, and looked set to snap a two-day losing streak as U.S. bond yields bounced back from lows session despite the Federal Reserve's March meeting minutes confirming the central bank is not rush to hike rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.09% to 92.51
"Participants noted that it would likely be some time until substantial further progress toward the Committee's maximum-employment and price-stability goals would be realized and that, consistent with the Committee's outcome-based guidance, asset purchases would continue at least at the current pace until then," the minutes showed.
The minutes didn't offer any new insight into the Fed's thinking on monetary policy, but rates turned positive, pushing the dollar higher.
The U.S. 10-year bond yield rose 1 basis point to 1.665% after falling to 1.628% at the lows of the day.
The dollar had made poor start to the week falling for two-straight days, but some were wary of suggesting a downtrend was forming ahead of the minutes.
"The greenback has been showing signs of weakness this week, especially versus the low-yielders, but it seems too early to conclude this is the start of a broader USD downtrend just yet," ING said.
The dollar and yields will come into focus again on Thursday as Fed Chairman Jerome Powell is set to participate at an IMF panel discussion on global growth.