- Yields Stabilize as Dollar Drops From Highs
- Euro Bolstered by Positive Vaccine News
- Markets Quiet With Fed Meeting in Focus
US Dollar yields have retreated from recent highs as the bond market begins to stabilize alongside the Dollar with both having seen record spikes in the previous quarter. A weakened USD has further underlined a positive week for Europe and the single currency. This coming on news the vaccine program there has finally picked up the pace. Trading on the forex market and stock market both remains relatively quiet as many traders await the release of the FOMC meeting minutes today.
10-Year and Greenback Dip From Peaks
With an increasing expectation week on week that the economy was liable to overheat, US Treasury yields had run-up to their highest levels of late. These topped close to 1.8% at the beginning of the month. Not all that high in a historic context, but a very fast run up from where they had been. This movement had come on the injection of vast amounts of economic stimulus and a feeling that inflationary pressure would soon overcome the market.
With these fears seemingly unfounded, and the Federal Reserve standing strong on their commitment to keeping rates low while allowing inflation to hit a 2% target, the yield has dropped back to a more stable level around 1.64%. This has allowed those in forex trading to once again venture beyond the safe-haven Dollar which has also dropped back.
Euro Enjoying Delayed Boost
It is all too rare at the moment that the Euro enjoys a day in the sun. That is exactly the case today however as the currency is taking advantage of a number of other ongoing factors. A vast improvement in vaccine schedules for the region appears to be driving the strength. The majority of the population is expected to be vaccinated by the end of June.
This positive news has come at the right time with forex brokers noting a Dollar weakness amid dropping yields. These, alongside a weakening Greenback, have allowed the Euro to kick on. It is now trading back above $1.19 and in a market where the sentiment is improving. With President Biden set to further outline his infrastructure plan later, it could be a further boost to the day for the Euro.
Markets Poised for FOMC Minutes
Markets on Wall Street have opened the day reasonably flat but inching higher after another quiet day yesterday. This shows that many remain in wait for a couple of events happening later today. These are the release of the FOMC meeting minutes, and further details from the President on his proposed infrastructure plan.
Both could bring yet more good news to a buoyant market where the S&P 500 remains close to a new record high with continued gains being seen in many of the reopening stocks. This includes travel stocks like airlines and the cruise industry with the index nearing 4100 points.