Dollar Up, Halts Rally as U.S. Treasury Yields also Cool By

By Gina Lee

Investing.com – The dollar was up on Thursday morning in Asia but retreated as the week’s rally in U.S. Treasury yields also cooled. However, higher commodity prices supported Canadian and Australian equivalents.

The that tracks the greenback against a basket of other currencies inched up 0.03% to 95.528 by 12 AM ET (5 AM GMT).

The pair inched up 0.09% to 114.43. Japanese trade data released earlier in the day showed that the was –JPY582.4 billion ($5.09 billion) and the was –JPY0.44 trillion in December. grew 17.5% and grew 41.1%.

The pair was up 0.40% to 0.7238, with Australian data released earlier in the day showing that the was 64,800. The data also showed that the was 41,500 and the was 4.2% in December.

The pair was down 0.27% to 0.6767.

The pair inched down 0.02% to 6.3437, with the cutting the from 3.8% to 3.7%, and the five-year LPR from 4.65% to 4.6%, earlier in the day.

The pair edged up 0.14% to 1.3624. The two-year gilt yield rose to 0.958% on Wednesday, the highest level since March 2018, and gave the pound a boost.

The Australian dollar extended Wednesday’s gains, while the Canadian dollar hit a 10-week high the same day before paring gains.

“Overnight commodity prices were the big driver for commodity currencies, but you’ve still got the undertone that the omicron COVID-19 variant is not going to have a lasting detrimental impact on the global economic outlook,” Commonwealth Bank of Australia (OTC:) senior economist and currency strategist Kim Mundy told Reuters.

Oil was mixed on Thursday but broadly remained near October 2014 highs. Newcastle coal futures are at their highest since October 2021.

Governments worldwide are beginning to ease quarantine rules and reviewing COVID-19 curbs despite the spread of omicron continuing. This attempt towards a semblance of normalcy was motivated by omicron’s lower severity and boosted a rally in commodities.

Meanwhile, investors are also bracing for the U.S. Federal Reserve to tighten monetary policy faster than expected in its to be handed down on Jan. 26. Fed funds futures have fully priced in an interest rate hike in March 2022, with four hikes expected within 2022.

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