Dollar Rises Along With Treasury Yields


Dollar Rises Along With Treasury Yields

APRIL 09, 2021

The U.S. dollar is up a touch this morning, gaining 0.2%. 


The dollar is likely benefiting from rising yield prices in the U.S.  Nevertheless, the positive risk sentiment is alive and well.  Both European and American shares are trading near record highs and futures show the S&P will open in the green today.

This morning’s data could prove interesting.  Earlier this week Jerome Powell stated that the U.S. growth trajectory remains strong and without surging inflation.  This morning’s PPI reading is expected to show only modest price pressures on producers.  The data was expected to hit the wire at 8:30 a.m. but has not as of yet.

The Canadian dollar is making strong moves this morning following impressive jobs data.  Canada added 303K jobs in March, beating estimates of 100K.

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Risk-on sentiment has bolstered the Euro and allowed the common currency to come off its lows of last week.  However, the Euro is under pressure this morning on rising Italian bond yields.  The yield on the Italian 10-year bond spiked the most since February following a report that new Italian Prime Minister Mario Draghi is planning 40 billion euros in new borrowing.

Poor economic data also dragged on the common currency.  Both Germany and France saw unexpected declines in industrial production in February.  The poor result might be a result of lockdowns and a stumble to rollout vaccines quickly.  However, both countries have made significant strides since February so perhaps this data will be a one-off.


The British pound continued its negative momentum and is poised to have its worst week since before December’s Brexit trade deal.  The main concern remains the likelihood that the U.K. will be unable to continue to outpace some of its rivals on the vaccine front due to issues with the AstraZeneca jab.  While the sterling will eventually carve out a bottom, it looks like a smart move to stay away from the one-way pound weakness train.