The dollar is trading near two-week lows, and Fed policymakers are taking a dovish stance. An increase in bond yields could lead to a tightening of monetary policy.
The dollar has not seen much change but is trading near two-week lows,
Minutes from a Federal Reserve meeting stated that policymakers are taking a cautious stance. However, investors are looking forward to key data on US inflation.
Currently, the dollar index, which measures the performance of the US currency against six competing currencies, is trading at 105.64, near its lowest level since September 25, which is 105.55.
It is noted that US central bank officials point to the uncertainty surrounding the economy, oil prices and financial markets, which supports “the perception of moving forward with caution in determining the appropriate extent to tighten monetary policy again.”
Rising bond yields are a factor that could allow the Federal Reserve to end its cycle of raising interest rates. US CPI data for September is expected later today, which is expected to show inflation over the past month at a moderate level.
Ten-year US Treasury bond yields fell by 2.4 basis points to 4.573 percent, after reaching their highest levels since 2007 last week at 4.887 percent. The Euro rose 0.08 percent to $1.0628, after touching its highest level in more than two weeks, while the yen generally stabilized at 149.16 against the dollar. The pound sterling reached $1.2317 in recent transactions. The Australian Dollar rose 0.09 percent to $0.6419, while the New Zealand dollar fell 0.09 percent to $0.6014.
