US dollar dips along with yield on Treasury notes

[NEW YORK] The dollar weakened slightly on Wednesday but currency markets generally lacked direction ahead of next week's decision on monetary policy from the US Federal Reserve.

Toward 2100 GMT, the euro was worth US$1.1250, up from US$1.1217 the day before. The pound bought US$1.3238, up from US$1.3196.

According to Boris Schlossberg of BK Asset management, one factor driving down the dollar was Wednesday's decline in the yields of certain Treasury bonds.

Yields on ten-year T-notes finished at 1.70 per cent, down from Tuesday's 1.73 per cent and reversing some of the gains made over the previous days.

The Fed is due to begin a two-day meeting on Tuesday. Policymakers have sent conflicting signals about the direction of interest rate policy but investors appear not to believe an increase is highly likely.

"The main driver today is just the fact US yields are (down)," said Boris Schlossberg of BK Asset Management. "That's depressed the US dollar."

AFP