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Title: Dollar Up, Boosted by Rising U.S. Yields

Jun 02, 2022 01:04AM ET

By: AnalysisWatch

The dollar rose Thursday morning in Asia, hitting a three-week high against the yen in early Asian trading. The US currency held firm and was supported by rising US Treasury yields, which hit two-week highs overnight.

The U.S. dollar index, which tracks the greenback against a basket of other currencies, rose 0.04% to 102.34 at 12:57 PM ET

The USD/JPY pair fell 0.06% to 130.04.

AUD/USD fell 0.15% to 0.7164 and NZD/USD fell 0.04% to 0.6480.

USD/CNY was up slightly by 0.19% to 6.6989 and GBP/USD was up 0.04% to 1.2487.

The dollar climbed to 130.23 yen, its highest level since May 11 and extended Wednesday's 1.1% gain. It was also heading back towards the 20-year high of 131.34 reached in May.

The euro traded at $1.0654 after falling 0.81% to a 10-day low overnight.

The benchmark US 10-year yield hit a two-week high of 2.951% on Wednesday as data showed US manufacturing activity rose in May 2022 as demand for goods remained strong. The Manufacturing Purchasing Managers' Index (PMI) at 57 and the ISM Manufacturing Index was 56.1.

US job openings also remained at high levels, with the Institute for Supply Management (ISM) manufacturing employment index at 49.6 and the JOLTs job openings index at 11.4 million.

Yields have been trending higher as the US Federal Reserve has been rapidly raising interest rates in an attempt to contain inflation and avoid an economic recession.

The 10-year yield was slightly weaker at the start of Asia, at 2.9145%.

Investors also await Friday's US jobs report, including nonfarm payrolls. The European Central Bank will hold its monetary policy meeting next week, where it is expected to provide more details on its plans to raise interest rates.

In the Asia-Pacific, the Australian dollar was little changed. As for cryptocurrencies, bitcoin was trading around $29,800 after falling overnight, failing to maintain its rise above the $30,000 threshold from earlier in the week.

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