The euro fell to its lowest level in 3 weeks with the rise in US bond yields


The dollar rose on Monday with the rise in US Treasury yields and expectations of more fiscal stimulus, which pushed the US currency to rise against its competitors, while the euro fell to its lowest level in three weeks.
US President-elect Joe Biden, who takes office on January 20 with the Democrats controlling both houses of Congress, promised to spend “trillions” of dollars on additional aid to relieve the pandemic.
Usually, additional spending plans push investors to worry about rising inflation and its harmful effect on the US dollar with the weak economy, but the green currency has found support in the past few weeks thanks to high US bond yields.
“It is not surprising that the recent acceleration in US real returns has reminded foreign exchange markets of an end to the focus on inflation and an assumption of a more comprehensive approach to valuing the dollar,” Commerzbank experts said in a note.
The euro fell to $ 1.2151, its lowest level since December 21, and down about 2% from its high last week of $ 1.2349.
The nominal yield of the US benchmark 10-year bond is up more than 20 basis points to 1.1187 percent this year, which helped the dollar climb to a one-month high of 104.20 against the Japanese yen.
The dollar index has lost about 12 percent since it reached a three-year peak in March, but it is more than 1.3 percent higher than the nearly three-year low it hit last week. The index rose 0.37% to 90,638 on Monday.
The Australian dollar fell 1.1 percent to $ 0.7679, as it was not affected by the strong performance of domestic retail sales for another month. The dollar also rose 0.11 percent to 6.4820 yuan after weak factory gate delivery prices in China.


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