The dollar retreated from a three-month high as U.S. Treasury yields stabilized around 2.96% Tuesday. The greenback is pushing higher against the safe-haven Japanese yen and euro, while the pound got some support from public sector borrowing numbers.
Dollar still in demand
The USD edged back from the highs Tuesday morning, but is still leading against its major peers.
The 10-year U.S. Treasury yield was nearing 3% Monday, but was unable to push through the psychological threshold and is around 2.96% Tuesday morning.
EUR/USD is trading down around 1.220 after dipping as low as 1.219 earlier this morning when German IFO numbers came out lower than expected.
The IFO expectations released by CE Sifo Group are an indicator of the business climate and all three readings missed expectations.
There is no other economic data from the Eurozone today. The U.S. home price data and new home sales will be released later this morning, but they are considered second tier data and will likely not move the markets.
Sterling able to bounce off the lows
The pound is gaining against the greenback after falling as low as 1.392 early Tuesday.
Better-than-expected U.K. Public Sector Net Borrowing for March gave some support to the sterling. The data showed a surplus of £0.262 billion, compared to deficit of £1.6 billion.
GBP/USD was trading around 1.395 as the U.S. market opened.
Dollar reaches higher against JPY
The dollar reached 10-week highs against the Japanese yen Monday morning and has since continued to rise. USD/JPY is holding above 108.7 Tuesday morning and currently bounding above and below the 109 mark.
The rising U.S. treasury yields and growing optimism around North Korean denuclearization have investors abandoning the safe-haven yen.
Chinese stocks get a boost
Chinese stocks, which have taken some hits as of late, got a boost overnight after Chinese leaders signaled they are prepared to tweak economic policy if trade tensions threaten the economy.
Meeting the country’s economic goals this year will be harder due to geopolitical complications, according to a statement following a Politburo meeting with President Xi Jingping. The statement also mentioned the need to increase domestic demand.