For the first time in 16 years… US Treasury bonds rise 5%
For the first time in 16 years… US Treasury bonds rise 5%
2023-10-20 02:27
Shafaq News/ The dollar briefly touched the 150 level against the closely watched yen on Friday, supported by a rise in 10-year US Treasury yields towards 5% after Federal Reserve Chairman Jerome Powell indicated there was room for further interest rate hikes.
The yield on the benchmark 10-year Treasury note, which rose 5% for the first time in 16 years overnight, rose 30 basis points this week — its biggest weekly rise since April 2022.
The war in the Middle East sparked a rush into safe-haven assets such as gold and the Swiss franc, but trading in Treasuries was dominated by interest rate expectations.
However, this did not translate into a similar strengthening for the dollar this week, which made only marginal gains while manipulating the 150 level against the yen. This figure represents the point at which many market participants believe the Japanese Ministry of Finance could intervene to support the currency.
Speculators have nearly doubled their bullish positions in the dollar against other G10 currencies this month to the highest level in a year.
Meanwhile, the USD/JPY pair, which rose as much as 0.14% to 150.00 on Friday, settled at 149.870, and tends to track US 10-year bond yields.
Financial markets show that traders fully expect to see no change in interest rates at the Federal Reserve’s next policy meeting.
But the chances of cutting interest rates in the first half of next year are fading quickly, according to a recent Reuters poll.
Elsewhere, the pound fell as much as 0.37% to two-week lows after a series of data showed British consumer confidence collapsing in October after weak retail sales the previous month.
The British pound fell 0.2 percent to $1.2116, exceeding its lowest levels in two weeks.
The euro stabilized at $1.0572, while the Swiss franc, which received demand from safe haven flows, is heading for its largest weekly gain against the dollar in three months, after rising one percent.
On Friday, the Swiss franc also recorded its highest levels against the euro since 2015, when the Swiss National Bank canceled its peg between the two currencies. The Swiss franc settled in the latest trading at 0.94345 against the euro.
In Asia, the Chinese yuan settled in the external market at 7.3361 to the dollar, after China kept its key lending interest rates unchanged at the monthly fixation on Friday, in line with market expectations.
shafaq.com
