Dollar leap as U.S. Bond yields move higher by Investing.com

By Yasin Ebrahim

Investing.com – The dollar jumped against its rivals Monday, led by a rise in the U.S. Treasury interest rates as a sense of risk became positive amid governments’ efforts to reopen their economies. Gains against the pound also lifted the greenback.

The one that measures greenback against a trade-weighted basket of six major currencies increased 0.49% to 100.22 from a low of 96.67.

The reopening of economies globally helped give rise to appetite risk, with investors apparently betting than global growth likely to have slowed, giving Treasury interest rates higher and increasing the greenback.

USA. rose 5.4% to 0.718%, although the upside is likely to be limited amid expectations that the Federal Reserve could be forced to lower interest rates below zero,

Ongoing expectations of negative interest rates come just days ahead of Federal Reserve Chairman Jerome Powell’s virtual conference to provide an economic update Wednesday at 1 p.m. 9am ET (1pm GMT).

“We may hear Powell further increase the outlook for inflation risk. Powell may also take the opportunity to tackle the opportunities for additional policy instruments such as negative interest rates,” Scotiabank said.

The dollar’s progress was also aided by gains against the pound as Prime Minister Boris Johnson’s move to ease restrictions on the lockout had dampened the impact.

fell 0.62% to $ 1.2330.

The bright start to the week for the dollar could continue amid signs that traders are stepping up their bullish stakes on the greenback.

Net long positions in the dollar rose for the seventh consecutive week, according to the CFTC’s positioning report.