July 2, 2022
  • July 2, 2022

FOREX-Dollar Holds Gains As Inflation Fears Boost Yields

By on May 13, 2021 0
    * Graphic: World FX rates tmsnrt.rs/2RBWI5E
    * Dollar stands tall after strong CPI print
    * Higher Treasury yields increase dollar's appeal
    * Traders shift focus on jobless claims and retail sales

    By Stanley White
    TOKYO, May 13 (Reuters) - The dollar held gains on Thursday,
supported by higher Treasury yields after a bigger-than-expected
rise in U.S. consumer prices fanned fears about an increase in
inflationary pressure.
    Traders will now turn their attention to U.S. weekly jobless
claims due later on Thursday and retail sales numbers on Friday
to determine whether consumer prices will continue to rise.
    The greenback is likely to continue to rise as some
investors unwind bearish bets on the currency and reposition for
more sustained inflation as more countries leave behind the
coronavirus pandemic, analysts said.
    "The move in the dollar was fuelled by the upward surprise
in consumer prices, but also because the market was caught on
the short side," said Shinichiro Kadota, foreign exchange
strategist at Barclays.
    "This market is aware of the potential for further upside
surprises to inflation. This will support the dollar."
    The dollar bought 109.55 yen, close to its
strongest level in five weeks.
    Against the euro, the dollar stood at $1.2083,
holding onto a 0.6% gain from the previous session.
    The British pound bought $1.4068.
    The dollar also rose to 0.9083 Swiss franc, close
to a one-week high.
    U.S. consumer prices increased by the most in nearly 12
years in April as booming demand amid a reopening economy pushed
against supply constraints, data on Wednesday
showed.
    Benchmark 10-year U.S. Treasury yields rose to a
five-week high of 1.7040%, which increases the appeal of holding
dollar-denominated assets.
    Signs of stronger labour market and increased consumer
spending would offer more evidence that inflationary pressure
will pick up, which could push yields and the dollar even
higher, traders said.
    
    ========================================================
    Currency bid prices at 0053 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.2083        $1.2071     +0.10%         -1.10%      +1.2084     +1.2070
 Dollar/Yen                   109.5500       109.7050    -0.14%         +6.07%      +109.7750   +109.5550
 Euro/Yen                                                                                     
 Dollar/Swiss                 0.9083         0.9089      -0.06%         +2.68%      +0.9092     +0.9084
 Sterling/Dollar              1.4068         1.4055      +0.11%         +2.99%      +1.4070     +1.4054
 Dollar/Canadian              1.2113         1.2135      -0.16%         -4.86%      +1.2133     +1.2114
 Aussie/Dollar                0.7732         0.7726      +0.10%         +0.53%      +0.7735     +0.7718
 NZ                           0.7171         0.7161      +0.16%         -0.13%      +0.7172     +0.7155
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 

    
 (Reporting by Stanley White; Editing by Sam Holmes)