Dollar Continues its Surge in Forex Markets as Yields Rise Again

Jacob Friedman

A rise in the benchmark US Treasury debt yields spelled good news for the dollar yesterday.

The rise in the 10-year Treasury debt yields came as a result of rises in the stock markets – and the contagion effect was clear to see.

The US dollar index, which tracks the greenback compared to six other global currencies, went up by 0.2% or so over the course of the night and reached 96.765.

Elsewhere, increased signs that some of British Prime Minister Theresa May’s backbench Conservative colleagues might support her Brexit deal spelled good news for the pound.

It rose by 0.1% in the GBP/USD pair and reached $1.3215.

The single European currency, which had a bad day on Monday and knocked 0.4% off its value, went up a little against the US dollar.

The Australian dollar, which saw significant rises earlier in the week, remained calm in the AUD/USD pair at $0.7135.

With the middle of the week now here, it’s important for forex traders to be sure they’re prepared for the many events coming up on the economic calendar.

There’ll be a wide range of speeches from senior figures at the European Central Bank over the course of the day. Sabine Lautenschläger​, who sits on the Bank’s Executive Board, will speak at 10am GMT.

Luis De Guindos, the Vice President of the Bank, will speak at 10.45am GMT. While a third speech will follow at 1.30pm GMT from Yves Mersch, who also sits on the Bank’s Executive Board.

Elsewhere, Canadian international merchandise trade data for January is expected at 12.30pm GMT. This is expected to show a change from $-4.59 billion to $-3.5 billion.

On Thursday, European consumer confidence information for March is expected at 10am GMT. This is due to show no change from its previous position of -7.2.

A number of key US data releases will also be out. Annualised gross domestic product data for the fourth quarter of last year will be out at 12.30pm GMT, and it is expected to show a change from 2.6% to 2.4%. Personal consumption expenditure figures for the fourth quarter of last year are also expected then. Quarter on quarter, it was last recorded at 1.5%.

Over in Germany, there’ll be a release of the preliminary harmonised index of consumer prices for March at 1pm GMT. These are due to show a month on month change from 0.5% to 0.6%.

A speech from Richard H. Clarida, who serves as the Vice Chairman of the Board of Governors of the US Federal Reserve System, will occur at 1.30pm GMT.

This will be followed at 2pm GMT by a further US data release, this time covering pending home sales for the month of February. Month on month, this is expected to show a change from 4.6% to -1%.

The day will be rounded off by the release of the Tokyo consumer price index (excluding fresh food) covering March. Year on year, this is expected to remain at its previous position of 1.1%.

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