The dollar continued to rally on Tuesday morning in Asia along with the higher yields on U.S. Treasuries that hit a four-year high, and the rally in the dollar weighed down the yen. Meanwhile, eyes were on the Aussie in the morning as Australia released some lacklustre CPI data.
The U.S. dollar index that tracks the greenback against a basket of six major currencies gained 0.01% to 90.70 at 11:28PM ET (03:28 GMT), the strongest level since March 1.
The dollar gained a momentum and hit a three-month high as United States 10-Year reached 2.99% for the first time in more than four years, as concern about inflation returned.
The recent bounce in yields and the dollar came as strengthening inflation prospects added to expectations of a more hawkish approach from the Federal Reserve this year.
As for the economic calendar, the U.S. will release its March new home sales data and CB consumer confidence for April later in the day. As the consumer confidence measures the overall economic activity, a higher-than-expected reading will further give the dollar a boost.
In Japan, the USD/JPY pair gained 0.08% to a one-month high at 108.81. The yen dropped as the dollar climbed thanks to increases in yields of U.S. Treasuries. Yields on 10-year notes are close to 3%, the highest level since early 2014.
The AUD/USD pair steadied at 0.7605. Australia’s first quarter consumer priceinflation came in at 0.4% compared to the same period last year, missing the estimate of 0.5% and down from the previous quarter’s print of 0.6%. The Aussie dropped in early morning amid disappointing economic data and a dovish Reserve Bank of Australia (RBA) that looks set to keep rates well into 2019, but the Aussie recovered later on.
In China, The People’s Bank of China set the fix rate of yuan against the dollar at 6.3229 versus the previous day’s 6.3034. The USD/CNY pair eased 0.03% to trade at 6.3154.