Dollar Drifts Near Lows as Treasury Yields Ease
The US dollar hovered near multi-month lows against major peers on Wednesday as Treasury yields eased from recent highs. The Federal Reserve's latest policy meeting minutes are expected later in the day, which may provide clues on interest rates.
The euro inched up 0.1% to $1.1585, remaining close to a two-month high touched earlier this week. Sterling was a touch higher at $1.3538, holding near a three-month high ahead of British inflation data due later on Wednesday.
A selloff in US Treasuries appeared to have paused amid a lack of economic data or other obvious catalysts. The yield on the benchmark 10-year Treasury note was last at 4.686%, while that on the 30-year bond fell to 5.268% from its highest in nearly 20 years.
Investors are scaling back rate-hike bets after recent economic data pointed to a softer US economy, including unexpected job losses in July and mild inflation readings. Harvinder Kalirai, chief global fixed income and currency strategist at Alpine Macro, said that if the Fed does not follow through with rate hikes, bond yields should be limited.