Dollar creeps towards 18-month high, euro lags as bond yields rise again
TLT•The dollar rose towards its strongest level in 18 months, while the euro fell 0.2% to $1.1174, near a 17-month low, as bond yields rose. Fed minutes signaled further tightening may be needed, and futures priced in a December rate hike.
1. Dollar and euro moves
The dollar rose towards its strongest level in 18 months on Thursday, while the euro fell to its lowest level since May last year as euro zone bond yields rose. The euro was down 0.2% at $1.1174, close to a 17-month low, and the spread between German and French 10-year yields widened by 5 basis points.
2. Fed minutes and rates
Minutes from the Federal Reserve’s September 15-16 meeting indicated that policy might need to be tightened further. Fed funds futures priced an 80% probability that rates would remain on hold at the next meeting ending October 28, while a December hike was fully priced in.
3. Other currencies
The dollar index was up 0.2% at 102.40 after rising 0.4% on Wednesday. The dollar rose 0.1% against the yen to 158.27; the Australian dollar fell 0.3% to $0.6943, and the New Zealand dollar declined 0.2% to $0.5588.
