Dollar and euro drift, yen slips as markets seek direction
TLT•The dollar was little changed against the yen and euro as higher-yielding currencies edged up, while political unrest in France and Italy weighed on market confidence. French-German 10-year bond spreads widened 9.9 basis points to 147.3 basis points on Monday.
1. Currencies trade narrowly
The US dollar churned in early Asian trading on Tuesday as a tepid recovery in investor confidence supported higher-yielding currencies. The euro was steady at $1.1216, while the pound and Australian and New Zealand dollars each rose 0.1%. The dollar was flat at 158.56 yen ahead of a Japanese 20-year bond auction.
2. Europe weighs on sentiment
Political risk in Europe continued to test traders’ nerves after French authorities set curfews in several cities following anti-government protests. Italy’s government said it would dispatch 500 troops after two days of unrest. The spread between French and German 10-year government bonds widened 9.9 basis points on Monday to 147.3 basis points.
3. Other market moves
The US dollar index rose 0.2% to 101.98 on Monday, ending a two-day losing streak. The dollar was flat at 6.6811 yuan offshore after China’s central bank kept interest rates unchanged. The US 10-year Treasury yield was flat at 5.131%; bitcoin was little changed at $81,906.58 and ether rose 0.3% to $2,405.99.
