LONDON (Reuters) – President-elect Joe Biden’s fiscal stimulus pushed US government bond yields higher.
The 10-year Treasury yields increased after the report was reported by CNN, the stimulus would be around $ 2 trillion, adding support for the dollar.
In early European morning trading, there was a slight change in the dollar index, which was 0.04% at 90.320, as investors waited for Biden and later planned for “trillions” of dollars in pandemic relief.
The dollar has risen in four out of the last five trading sessions as it has the potential for greater stimulus on US government bonds, sending benchmark Treasury yields above 1% for the first time since March.
Expectations for stimulus are already running high, but many analysts believe spending has already increased.
ING analysts said, “We think the fiscal cat is already out of the bag: it will take a lot of time to surprise the markets after re-pricing last week.” “The scope behind the announcement alone to resume the reflection trade is limited.”
Furthermore, the slowdown in the recent recovery of the currency is threatened by the creation of dollar positions.
FX speculators have been net dollars since mid-March, as investors’ increasing appetite for risky assets hurt greenback demand.
Because the US stimulus supports risk sentiment, it can weigh on the dollar, which is considered a safe haven.
The euro slipped 0.05% to $ 1.214 after slipping 0.4% on Wednesday.
The dollar rose 0.13% to 104.02 yen.
Bitcoin held on to a 10% profit made on Wednesday after slipping nearly $ 12,000 from the previous week’s record high of $ 12,000. It rose 3% to $ 38,860 on Thursday, up from $ 30,261.13 on January 11.
Interest in cryptocurrency is increasing as institutional investors initiate heavy purchases, seen as a rate of inflation and, if it is adopted more widely, a benefit.
Reporting by Kevin Buckland; Editing by Ana Nicolasi da Costa, Simon Cameron-Moore, Larry King