Dollar Edges Up as U.S Yields Rise; Yen Remains under Pressure

The dollar moved higher during early Tuesday in European trade as a result of rising U.S Treasury Yields which provided a fair boost after last weeks Fed Reserve tapering program.

The dollar index traded 0.1% higher at 93.472 continuing its rise of a few weeks. On the other hand, USD/JPY rose 0.3% to 111.29 since early July. GBP/USD traded at 1.3696 whereas AUD/USD rose 0.1% to 0.7295. According to data releases, retail sales in Australia fell by 1.7% after a new series of Covid restrictions were put in place.

EUR/USD saw a decline of 0.1% to 1.1686 as traders faced uncertainty regarding Germany’s election week and a sudden rise in the country’s consumer confidence levels. According to the GFK consumer sentiment index, a rise of 0.3 points was recorded.

Last week’s Federal Reserve meeting indicted asset tapering to begin by November and a hike in interest rates around mid-2022. Analysts at Nordea said in a note, “Unless the nonfarm payrolls report for September falls off a cliff, the November taper decision seems carved in stone. A $40 billion-a-quarter tapering process commencing in November (with initial focus on MBS purchases) and a first lift-off in the late autumn of 2022 seems likely to bet on for now.”