Dollar dips after previous gains amid COVID-19, election uncertainty, Treasury yield falls
The U.S. dollar slipped on Tuesday as investors took some profits after the previous session’s gains that also saw a sell-off in equities, while worries about a second coronavirus wave and uncertainty ahead of the U.S. election persisted.
The greenback fell against the currencies that benefit mostly from higher risk appetite such as the euro, sterling, and commodity-linked currencies rose.
Monday saw the steepest stock market sell-off in a month and a bond rally, but foreign exchange market activity has remained relatively muted, with price moves on Tuesday limited.
After initially falling, the euro was up 0.2% at $1.1826 in late morning trading.
The dollar index, which measures the greenback against a basket of major currencies, weakened 0.2% to 92.92.
The greenback fell 0.3% versus the yen to 104.53 yen.
“Many sources of uncertainty are still preventing clearer trends from emerging,” UniCredit analysts said in a research note. “The impasse on both U.S. budget talks and Brexit negotiations, as well as the implications of rising COVID-19 infections on 4Q20 GDP growth, play in favor of more euro-dollar and sterling-dollar stabilization for now,” they said, pointing to levels of “just above $1.18 and $1.30, respectively.”
10-year Treasury yield falls for a third straight day amid market volatility
Treasury yields fell on Tuesday as investors flocked to safe bonds amid heightened volatility on Wall Street ahead of Election Day.
The yield on the benchmark 10-year Treasury note dipped to 0.791%, falling for a third straight session. The 10-year rate dropped nearly 4 basis points on Monday amid a big sell-off in equities. The yield on the 30-year Treasury bond was also down at 1.575%. Yields move inversely to prices.
Reference: CNBC
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