Dollar weakens in early trade

11 Apr 2023 , 08:28 AM

The U.S. dollar index, which compares the value of the dollar to six important currencies, including the yen, fell 0.06% in early Asian trading after rising by 0.39% at the beginning of the week.

The 10-year Treasury yield also slowed down in Tokyo trading following a steep two-day surge, helping to partially offset the yen’s more than 1% decline on Monday. The yen is quite sensitive to long-term U.S. government yields. The new governor of the Bank of Japan, Kazuo Ueda, promised to maintain the ultra-easy stimulus policy for the time being, which put extra pressure on the yen overnight.

Bitcoin, the most popular cryptocurrency, briefly reached $30,000 for the first time since June.

After increasing 1.1% over night, the dollar declined by 0.16% to 133.39 yen.

After data that was announced on Good Friday revealed that U.S. firms continued to hire at a rapid clip in March, driving down the unemployment rate, traders now believe the Fed is 74% likely to hike rates by another quarter point on May 3. Money markets priced a rise for next month as a coin toss last week.

The next crucial indicator for the path of Fed policy will be the consumer price index (CPI), which is coming on Wednesday.

Ten-year Treasury rates peaked overnight at 3.436% and then fell to a low of 3.41% in Tokyo. On Thursday, they fell to a seven-month low of 3.253%. On Wednesday, the dollar index hit a two-month low of 101.40.

The euro increased by 0.14% to $1.08745 after falling by 0.34% on Monday. The pound rose 0.11% to $1.2397 after falling 0.23% over the previous night.

The Australian dollar increased 0.12% to $0.6650, partially recovering from a 0.48% decline the previous day.

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