U.S. Dollar Drops As Treasury Yields Fall
January 18 2023 - 03:33AM
RTTF2
The U.S. dollar dropped against its major counterparts in the
European session on Wednesday, amid falling treasury yields and
expectations for a slower pace of rate hikes by the Federal
Reserve.
Investors focus on U.S. PPI and retail sales data due out at
8:30 am ET. Producer inflation is expected to fall 0.1 percent
month-on-month in December, after rising by 0.3 percent in
November.
Economists expect retail sales to drop 0.8 percent in December
from 0.6 percent in November.
U.S. treasury yields dropped, with the benchmark yield on the
10-year note touching 3.481 percent. Yields move inversely to bond
prices.
The dollar index that tracks the greenback against a basket of
other currencies touched 101.89.
The greenback fell to near a 1-year low of 0.9124 against the
franc and near a 5-week low of 1.2388 against the pound, off its
early highs of 0.9246 and 1.2254, respectively. The greenback is
poised to find support around 0.90 against the franc and 1.27
against the pound.
The greenback eased to 128.88 against the yen, from a 6-day high
of 131.57 seen in the previous session. On the downside, 113.00 is
possibly seen as the next support level.
The greenback weakened to a 5-day low of 1.3351 against the
loonie and a 2-day low of 1.0872 against the euro, from its prior
high of 1.3409 and a 2-day high of 1.0766, respectively. Next key
support for the greenback is likely seen around 1.30 against the
loonie and 1.11 against the euro.
The greenback depreciated to a 5-month low of 0.7036 against the
aussie and a fresh 5-week low of 0.6491 against the kiwi, after
rising to 0.6973 and 0.6419, respectively in early deals. The
greenback is seen finding support around 0.72 against the aussie
and 0.66 against the kiwi.
Looking ahead, Canada industrial product and raw materials price
indexes for December and U.S. PPI, retail sales and industrial
production, all for the same month, as well as business inventories
for November and NAHB housing market index for January will be
released in the New York session.
The Fed Beige book report will be released at 2 pm ET.
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