US Dollar Pressured by Falling Treasury Yields

Market Reviews

The British pound rose sharply today after European Court of Justice’s advocate general said that the UK has the right to unilaterally withdraw its notice of withdrawal from the European Union. Advocate General (Manuel) Campos Sanchez-Bordona proposes that the Court of Justice should declare that Article 50 allows the unilateral revocation of the notification of the intention to withdraw from the EU. And that possibility continues to exist until such time as the withdrawal agreement is formally concluded.

US dollar remains under pressure of falling treasury yields. US 10 year yields hits as low as 2.962. 10 year yield drops below 3% level for the first time since September. Canadian dollar and Swiss franc are following as the next weakest. Meanwhile, Japanese yen is the strongest one.

The euro also rose, as the drop in yields on US Treasury bonds contributed to the further selling of the dollar. The single currency was also lifter by strong Eurozone PPI report. Eurozone producer price inflation rose 0.8% mom, 4.9% yoy in October, above expectation of 0.5% mom, 4.5% yoy.

Today’s data also showed, that UK PMI construction rose to 53.4 in November, up from 53.2 and beat expectation of 52.5. That’s also the highest level in four months. UK BRC retail sales monitor dropped -0.5% yoy in November. Swiss CPI dropped -0.3% mom, rose 0.9% yoy in November, versus expectation of -0.1% mom, 1.1% yoy.

On stock markets, FTSE fell 0.51%, DAX lost 0.53%, CAC dropped 0.35%. Earlier in Asia, Nikkei dropped 2.39% to 22036.05, Singapore Strait Times fell 0.72% to 3167.79. But Hong Kong HSI rose 0.29% to 27260.44 and China Shanghai SSE added 0.425 to close at 2665.95.