U.S. Dollar Depreciates Amid Falling Treasury Yields
26 Juillet 2021 - 10:07AM
RTTF2
The U.S. dollar slipped against its major counterparts during
European deals on Monday, as treasury yields dropped after
high-level talks between the U.S. and China failed to resolve
outstanding issues between the two sides, with Beijing blaming
Washington for the "stalemate" in relations.
A sell-off in European shares, fueled by China's crackdown on
the tech sector, renewed demand for safe-haven treasury bonds.
China's Vice Foreign Minister Xie Feng accused the Biden
administration for suppressing the country's development and urged
Washington "to change its highly misguided mindset and dangerous
policy."
Investors focus on the Federal Reserve's monetary policy meeting
due this week for more hints about its plan to scale back the bond
buying program.
Economists do not expect any change to the Fed funds target rate
and quantitative easing programme when it ends its two-day meeting
on Wednesday.
All eyes will be on the central bank's ongoing debate on
tapering its $120 billion a month bond buying program.
Fed Chairman Jerome Powell acknowledged that current
inflationary pressures could be transitory and stimulus measures
will remain in place for some time.
U.S. new home sales for June are due out at 10 am ET.
The greenback slipped to a 10-day low of 1.3800 against the
pound, 4-day lows of 1.1800 against the euro and 0.9166 against the
franc, off its early highs of 1.3737, 1.1763 and 0.9202,
respectively. The greenback is likely to face support around 1.41
against the pound, 1.21 against the euro and 0.90 against the
franc.
The greenback pulled back from an early high of 110.58 against
the yen and edged down to 110.12. Next key support for the
greenback is likely seen around the 108.00 level.
The latest survey from Jibun Bank showed that the manufacturing
sector in Japan continued to expand in July, albeit at a slower
pace, with a manufacturing PMI score of 52.2.
That's down from 52.4, although it remains above the boom-or-but
line of 50 that separates expansion from contraction.
The greenback weakened to a 4-day low of 1.2545 against the
loonie, from a high of 1.2591 seen at 4:15 am ET. On the downside,
support is seen near the 1.22 level.
In contrast, the greenback held steady against the aussie and
the kiwi, after rising to a 5-day high of 0.7331 and a 4-day high
of 0.6948, respectively in previous deals. The greenback had ended
last week's trading at 0.7362 against the aussie and 0.6975 against
the kiwi.
U.S. new home sales for June will be published in the New York
session.
US Dollar vs CHF (FX:USDCHF)
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US Dollar vs CHF (FX:USDCHF)
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