TOKYO- The safe-haven US dollar remained broadly weaker on Wednesday as Treasury yields continued to retreat, restoring some calm to global markets and reigniting demand for riskier assets.
Commodity-linked currencies including the Australian dollar and the Norwegian krone held on to sizeable two-day advances.
The lower US yields also sapped some of the dollar’s allure among fellow low-yielding currencies, with the yen and Swiss franc bouncing off multi-month lows.
Bonds have been at the center of a storm in financial markets in recent weeks, following a dramatic jump in yields globally – but led by Treasuries – in defiance of central bankers’ insistence on patience in normalizing monetary policy as economies recover from the COVID-19 pandemic. Global stocks were knocked from near record highs, and commodities prices wobbled.
Fiscal stimulus has fueled market expectations for a rapid recovery, with President Joe Biden close to passing a $1.9 trillion spending package.
An index of the dollar against six of its major peers was little changed early in the Asian session Wednesday, after dropping back from a nearly one-month high overnight. – Reuters