The U.S. dollar retreated from a 10-week high against major peers on Tuesday despite Treasury yields surging toward a 16-year high. This comes as investors brace for Federal Reserve Chair Jerome Powell’s speech from Jackson Hole later this week.
Measuring the dollar against a basket of major currencies, the U.S. dollar index fell by 0.14% to 103.18, still just shy of Friday’s 103.68, a peak since June 12. The benchmark 10-year U.S. Treasury yield hit 4.366%; its highest level since November 2007.
“Surging long-term U.S. yields and the underwhelming response by China’s policymakers to ongoing stresses in China’s property and financial markets continue to provide bullish impulse,” Richard Franulovich, a currency strategist at Westpac, stated with regard to investors’ perceptions of the U.S. dollar.
The dollar fell 0.22% against the Japanese yen to 145.935. The sterling gained 0.16% against the dollar to $1.27765, while the euro rose 0.15% against the greenback to $1.0912.