US Dollar Weakens Again as Treasury Yields Slide Lower - Forex News by FX Leaders

US Dollar Weakens Again as Treasury Yields Slide Lower

Posted Wednesday, January 13, 2021 by
Arslan Butt • 1 min read

A decline in US Treasury yields has turned the US dollar bearish early on Wednesday after having strengthened for three consecutive sessions. At the time of writing, the US dollar index DXY is trading around 89.98.

After touching the highest level seen in 10 months during the previous session, the 10-year Treasury yields slid by almost 7bp, causing the greenback to lose over 1% of its value against the GBP and experience the sharpest daily decline against the EUR seen in over a month. Meanwhile, the bearishness in the USD helped commodity currencies AUD and NZD strengthen by over 70 cents and lift them from weekly lows.

Analysts have forecast that the recent rise in the value of the US dollar was a result of market correction, which has now come to an end. They anticipate the dollar to remain weak in the near future over mounting worries about the increasing trade and budget deficits in the US.

The recent victory of Democrats in the Georgia election have raised the likelihood of the US government increasing fiscal spending, which would mean higher borrowing. Later today, the greenback could experience some movement on the release of inflation figures.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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