The US dollar declined versus the euro on Tuesday however gained versus the Japanese Yen as disappointing bond auction resulted in high US Treasury Yields.
The Dollar index DXY which measures the US dollar’s movement versus its six major counterpart currencies declined to 77.962 on Tuesday’ s North American trading session as compared to 77.994 on Monday.
The selling pressure in the US dollar was increased after China announced to increase its key interest rates against the expectations of investors who were projecting a more tightening approach from the Peoples Bank of China. This is the third interest rate hike by Chinese Central Bank since October. According to experts measures like these are creating uncertainty among investors about China’s economy.
The Euro surged to 1.3634 versus the US dollar as compared to $1.3597 o Monday’s late trading session.
However the greenback advanced against the Japanese Yen to 82.55 as compared to 82.32 on Monday as the yields on US 10-year notes hit their highest since April which make the greenback more attractive for investors. The Yen is highly sensitive to US bond yields as Japan holds major proportion of US debts.
The British Pound declined to 1.6071 against the US dollar as compared to 1.6125 on Monday’s late trading session. The reason behind the declined in Pound Sterling was associated with the increase in tax on banks imposed by the British government.
The Australian dollar initially traded under selling pressure and declined to 1.0113 against the US dollar but later in session recovered the gained 0.3 percent to $1.0155.
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Daily forex trading news written by Rehan from DailyForexTrade.com
