Dollar Drifts Higher Ahead of 10Y Auction; Lira Slumps, U.K. Data Leaves GBP Cold
By Geoffrey Smith
Investing.com — The dollar was little changed in early trading in Europe Tuesday but still firmly in an upward trend, supported by rising long-term interest rates and by high demand from commodity buyers.
By 3 AM ET (0700 GMT), the Dollar Index, which measures the greenback against a basket of developed market currencies, was down less than 0.1% at 94.320, having touched a high of 94.442 overnight.
The dollar is being firmly underpinned by the rising trend in U.S. bond yields, as the market positions for a reduction in bond purchases by the Federal Reserve from next month onward. The benchmark 10-year Treasury yield hit a new five-month high of 1.63% during the Asian session after a quiet day when the cash bond market was closed for the Columbus Day holiday.
Demand for Treasuries will be tested later Tuesday at 1 PM ET with a 10-year note auction. Before that, the U.S….