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Dollar Turns Negative as 10-Year Bond Yield Retreats Below 3%

Investing.com – The dollar eased from two-month highs against a basket of major currencies as U.S. bond yields retreated from multi-year highs but sentiment on the greenback remained positive amid upbeat economic data.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.13% to 90.57 after hitting an intraday high of 90.85.

The 10-year U.S. treasury yield hit 3% for the first time since 2014 but the move above the key psychological level was met with resistance, pressuring the benchmark treasury yield to retreat below 3%, dragging the greenback lower.

The fall in treasury yields came despite data pointing to underlying strength in the U.S. economy after a raft of reports on housing and consumer confidence topped expectations, while manufacturing fell short.

The Commerce Department said Tuesday new home sales rose 4% to a seasonally adjusted annual rate of 694,000 units last month. That topped economists’ forecasts for 1.9% to 625,000 units.

The Conference Board’s consumer confidence gauge rose to a reading of 128.7 from 127.0 the previous month, topping economists’ forecast for a reading of 126.

The Richmond Fed manufacturing index slumped to -3 in April from its March reading of 15, undershooting economists’ estimates for a reading of 16.

The S&P/Case-Shiller 20-city home price index rose a seasonally adjusted 0.8% in February, and 6.8% for the year.

Elsewhere, GBP/USD rebounded from a recent slump to trade at $1.3973, up 0.23%.

EUR/USD rose 0.21% to $1.2235 despite investor concerns the European Central Bank could opt for a more cautious outlook on monetary policy tightening at a meeting this week.

USD/JPY tacked on 0.06% to Y108.77, while CAD/USD fell 0.15% to C$1.2830 as the latter pair came under pressure after the ongoing rally in crude oil prices underpinned the loonie.

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