Back
6 Aug 2013
Dollar supported as treasuries decline
FXstreet.com (London) - Treasuries dropped yesterday on the back of the performances of services industries in the US economy that are showing signs of improvements and boosting speculations for the Federal Reserve reducing the stimulus program by year-end.
The treasury yields should trend higher in response to an expanding economy while the Fed will begin to gradually reduces its stimulus programme. Meanwhile, the difference between yields on Treasury three-year notes and 30- year bonds widened to the most in almost two years prior to the States selling the securities during this weeks auctions. This again signals investors are demanding greater yields to own bonds, although as the economy improves, we are seeing less demand for the longer dated bonds as investors turn to stocks, supporting the dollar.
The treasury yields should trend higher in response to an expanding economy while the Fed will begin to gradually reduces its stimulus programme. Meanwhile, the difference between yields on Treasury three-year notes and 30- year bonds widened to the most in almost two years prior to the States selling the securities during this weeks auctions. This again signals investors are demanding greater yields to own bonds, although as the economy improves, we are seeing less demand for the longer dated bonds as investors turn to stocks, supporting the dollar.