February 5, 2018 / 6:06 PM / 3 months ago

FOREX-Dollar rebounds as U.S. yield spike stalls

    * U.S. bond market stabilizes after 10-year yield hit 4-year
peak
    * U.S. services sector strongest in over 12 years - ISM
    * ECB's Draghi sees risks from currency market volatility

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Feb 5 (Reuters) - The dollar rose against a basket
of currencies on Monday as the U.S. bond market selloff levelled
off after the 10-year yield hit a four-year peak on worries that
the Federal Reserve might raise interest rates faster to counter
signs of wage pressure.
    Analysts cautioned, however, that further gains in the
greenback would be limited as other economies seem poised to
expand quicker than the United States. Speculation that other
central banks besides the Federal Reserve may roll back stimulus
will probably cap the U.S. currency's recovery.
    "The dollar selling (had been) overdone," said Paul
Christopher, head global market strategist at Wells Fargo
Investment Institute in St. Louis. "We think rates are not going
to go up a lot more here."
    Early on Monday, the benchmark 10-year Treasury yield
 reached 2.885 percent, its highest since January
2014, after a robust jobs report showed wage growth last month
posted its biggest annual gain since June 2009. The yield was
last at 2.843 percent, down 1 basis point from late on Friday.
    The Institute for Supply Management's gauge on U.S. services
industries, which hit a 12-1/2 year high last month, also
supported the dollar on Monday.
    At 12:52 p.m. (1752 GMT), the dollar was up 0.3
percent against a basket of six major currencies at 89.469 after
gaining 0.6 percent on Friday.
    "Could (Monday's performance) change the trend?" Christopher
said. "I doubt it." 
    Data on currency futures positions showed net bearish bets
against the dollar swelled to $17.5 billion last
week, just shy of a five-year high.   
    The euro fell 0.4 percent to $1.2410, slightly below
a three-year high of $1.2538 on the EBS trading system
. 
    The euro briefly pared losses following upbeat comments by
European Central Bank President Mario Draghi before the European
Parliament. But Draghi said the current surge of the single
currency might impair its outlook for price stability.

    Against the yen, the dollar weakened in step with losses on
Wall Street, where rising bond yields have sparked selling in
stocks on concerns about rising borrowing costs on corporate
profits and consumer spending. 
    The greenback slipped 0.05 percent to 110.03 yen,
holding above a four-month low set on Jan. 26.
========================================================
    Currency bid prices at 12:32PM (1732 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2418        $1.2460     -0.34%         +3.52%      +1.2475     +1.2400
 Dollar/Yen       JPY=        110.0100       110.1000    -0.08%         -2.36%      +110.2900   +109.6600
 Euro/Yen         EURJPY=     136.62         137.23      -0.44%         +1.07%      +137.2200   +136.3300
 Dollar/Swiss     CHF=        0.9366         0.9310      +0.60%         -3.87%      +0.9376     +0.9288
 Sterling/Dollar  GBP=        1.4020         1.4120      -0.71%         +3.76%      +1.4150     +1.3988
 Dollar/Canadian  CAD=        1.2487         1.2424      +0.51%         -0.72%      +1.2499     +1.2398
 Australian/Doll  AUD=        0.7918         0.7920      -0.03%         +1.50%      +0.7953     +0.7891
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1631         1.1600      +0.27%         -0.50%      +1.1639     +1.1573
 Euro/Sterling    EURGBP=     0.8854         0.8820      +0.39%         -0.33%      +0.8871     +0.8812
 NZ Dollar/Dolar  NZD=        0.7288         0.7301      -0.18%         +2.85%      +0.7330     +0.7279
 Dollar/Norway    NOK=        7.7797         7.7311      +0.63%         -5.21%      +7.8006     +7.7007
 Euro/Norway      EURNOK=     9.6637         9.6324      +0.32%         -1.88%      +9.6781     +9.6023
 Dollar/Sweden    SEK=        7.9275         7.9035      -0.01%         -3.34%      +7.9412     +7.8825
 Euro/Sweden      EURSEK=     9.8449         9.8456      -0.01%         +0.06%      +9.8540     +9.8263
 
    
 (Additional reporting by Tommy Wilkes in London; Editing by
Larry King and Lisa Von Ahn)
  
 
 
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below