US greenback sees some promoting stress as yields sag

The US dollar is under mild selling pressure across the board as the trading week winds down in London.

The dollar benefited from the safe haven trade early in the week but markets have calmed and that’s led to the unwind of some safe haven flows. At the same time, the Treasury market has also been volatile but yields appear to have settled in a lower range.

A pair of Treasury auctions were weak on Wednesday and Thursday but came after a dramatic move lower in rates. Supply stung but it was contained and the levels were low enough to give the market confidence that 10-year yields can stay at 4% or lower.

Today 10 year yields are down 6% and that’s helping to weigh on the US dollar with the euro and pound both picking up ground. Both are still down on the week and are likely to take cues from the overall risk trade.