The US dollar continued to gain support from higher treasury yields ahead of the release of key inflation data.
The core price index (PCE), or better known as core personal consumption spending, became the inflation report observed by the US central bank tonight that is expected to show an increase.
10 -year U.S. bond yields strengthened to 1.6%, following reports that President Joe Biden would unveil his $ 6 trillion budget plan for fiscal year 2022 today.
The prospect of high spending and faster growth have provided temporary support for the stock market. However, the large expenditure also means that the country's debt burden is expected to rise higher, which it is predicted to exceed the World War II record by 2024.
Following the strengthening of bond yields, the US dollar traded close to a seven-week high against the yen, which is sensitive to rising yields, as well as being affected by the extension of the Covid-19 emergency in Japan.
The strengthening factor of the US dollar was also linked to profit-taking ahead of month-end trading, as on Monday, banks in the US and the UK will be closed for public holidays.
As for the European currency, the pound was seen stabilizing around 1.41800 against the US dollar, after being supported by Bank of England (BOE) policymaker Gertjan Vlieghe's statement on a faster -than -expected interest rate hike.
Meanwhile, the movement of the euro is still limited by the strengthening of the greenback dollar. Still, the currency is still holding on to its gains this week after soaring to a four -and -a -half -month high on Wednesday.
On the other hand, commodity trading continued to struggle looking for an uptrend as the US dollar gained strength.
