US Dollar Strengthens as Fed Officials Unaffected by Rising Bond Yields - Forex News by FX Leaders
US Dollar Strengthens as Fed Officials Unaffected by Rising Bond Yields

US Dollar Strengthens as Fed Officials Unaffected by Rising Bond Yields

Posted Tuesday, March 2, 2021 by
Arslan Butt • 1 min read

The US dollar is showing signs of strength against other major currencies as markets turn hopeful of the US economy recovering at a more rapid pace than its peers, even as US bond yields continue to climb higher. At the time of writing, the US dollar index DXY is trading around 91.34.

During the previous session, the dollar index soared to the highest level seen in three weeks and could even cross 91.60 – the highest value it had touched through February. Meanwhile, the Euro has weakened to a near two-week low as ECB officials turned more cautious about the recent strengthening in government bond yields.

While the ECB President Christine Lagarde and policymaker Francois Villeroy de Galhau expressed concern and suggested possible action against it, the US Federal Reserve, on the other hand, have played down any possible cause for concern due to the uptick in bond yields.

The US dollar has also been strengthened by the possibility of more fiscal stimulus driving faster recovery in the US economy even as the COVID-19 vaccine distribution spreads around the country. Additional bullishness was also driven by the manufacturing activity across US soaring to a three-year high during February, supporting expectations for rapid economic recovery.

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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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