Although the US 10 -year treasury yield recorded an increase to higher levels, it still failed to support the strengthening of the US dollar which was seen moving weakly continuing until the Asian session this morning (Wednesday).
Analysts see the factor driving the depreciation of the U.S. dollar is following a recent Reuters poll report seeing a majority of economists argue that the Federal Reserve (Fed) will wait until 2023 before raising interest rates.
This means the Fed will continue to maintain a loose policy for a longer period of time.
The report again curbed the advance of the US dollar previously where expectations for policy tightening through reduced bond purchases (tapering) will be implemented as early as this November.
Global stock indices that closed ‘green’ also signaled a recovery in market sentiment thus reducing the attraction of safe-haven currencies including the US dollar.
At yesterday’s New York session (Tuesday), U.S. housing data for September also posted a dismal reading, further adding to expectations that economic growth slowed in the third quarter.
The European currency took advantage of the opportunity to strengthen against the US dollar with a rebound in the value of the Euro after a weak move earlier in the week.
Meanwhile, the Pound Sterling remained strong continuing its bullish pattern since last week as investors remained optimistic about the policy tightening measures by the Bank of England (BOE) via a signal at the latest meeting.
The commodity currencies of the Australian dollar and the New Zealand dollar also performed well following the depreciation of the US dollar to continue to hunt for gains to the latest highs on the price chart.
The Canadian dollar also managed to put pressure against the US dollar supported by the positive development of the global crude oil market.
Meanwhile, gold trading remained gloomy after plunging from the $ 1,800 level last week despite recording an early rise on Tuesday yesterday.
