Dollar retreats from 18-month high as Treasury yields dip; Fed hike bets ease
TLT•The dollar index fell 0.2% to 101.99 after reaching an 18-month high, as Treasury yields declined and Fed officials’ comments tempered expectations for an October rate hike. The 10-year and 30-year yields touched three-week lows at 5.0933% and 5.4462%, respectively.
1. Dollar pulls back
The dollar slipped from an 18-month peak as falling Treasury yields weighed on the currency in a risk-off session. The dollar index dropped 0.2% to 101.99, giving back most of its gains after stronger-than-expected inflation data on Wednesday. The euro rose 0.6% to $1.1223, while sterling gained 0.4% to $1.3250.
2. Rate expectations ease
The 10-year Treasury yield reached 5.0933% and the 30-year yield fell to 5.4462%, both three-week lows. Fed officials, including Michelle Bowman and Mary Daly, said the central bank could wait for a clearer picture before its October 27–28 meeting, tempering market expectations for a rate hike. Investors were watching US producer price and retail sales data, as well as remarks from Fed Chair Kevin Warsh.
