The US dollar continued to strengthen against major currencies on Tuesday and strengthened to a one -year high against the yen as a stimulus package spurred an increase in bond yields and inflation expectations.
The US dollar has become more of an investor's choice following the collapse of Archegos Capital's investment fund. The US dollar index, which measures the greenback against other currencies, strengthened to a four -month high, strengthening by 0.35% to the exchange rate of 93.270.
Also influencing sentiment was that U.S. consumer confidence data rose in March to the highest level since the Covid-19 pandemic began. These data could be a catalyst and contributor to economic growth for the next few months driven by fiscal stimulus.
The report showed that the consumer confidence index rose to a reading of 109.7 this month, the highest level since the start of the pandemic in March 2021. This reading is up from a reading of 90.4 recorded in February.
At the same time, analysts say that the yen is also vulnerable to higher inflation expectations in the U.S. and rising long -term bond yields.
Ten -year U.S. Treasury yields rose to a 14 -month high on Tuesday ahead of President Joe Biden’s announcement of his plans in handling stimulus package payments.
The market is now focused on the NFP data to be released on Friday with the Fed so far informing that the data so far shows the labor market is in a weak state but is starting to show recovery.
The market expects that the US dollar will continue to find strong support.
