The US dollar hit a 3 1/2 month high today which was largely driven by rising U.S. Treasury yields. The massive surge in bond yields has prompted investors to shift safe-haven investments to the US dollar.
After falling 4% in the last quarter of 2020, the U.S. dollar has strengthened nearly 2.5% year -over -year as investors expect a rise in U.S. bond yields. will affect equity valuations and increase demand for the U.S. currency.
The latest economic figures also support economic growth as recorded recently with NFP data increasing by 379,000 last month. Today, the U.S. Senate finally approved President Joe Biden's $ 1.9 trillion recovery package.
According to market analysts, the labor market is expected to grow faster which is largely driven by the stimulus package recently approved by the Senate and the ever -increasing distribution of vaccines.
U.S. treasury yields rose to a one -year high of 1.62% on Friday. The US dollar index, which measures the greenback against major currencies, jumped 0.28% to 92.243.
The Australian dollar weakened 02% to $ 0.7670. The Euro depreciated almost 0.40% against the US dollar at an exchange rate of 1.1873. However, the GBP strengthened slightly against the US dollar to the exchange rate of 1.3853 as of 10.00 p.m.
