The dollar takes a breather with 10-year US yields pushing up borrowing costs
London — The dollar took a breather at a five-month high on Thursday, although government borrowing costs continued to grind upwards as oil prices hit their highest since 2014 at almost $80 a barrel. Ten-year US government treasury yields, which are a key driver of global borrowing costs, neared a seven-year high of 3.12% as higher oil prices pointed to higher inflation and followed Wednesday’s upbeat US retail sales numbers. Europe’s forex traders nursed dollar index positions after its latest surge, but euro-dollar was struggling to keep a foothold back above $1.18 and dollar-yen hit its highest level since late January at ¥110.57. "The big turnaround was the Japanese yen, there is clearly big time [US versus Japan] rate sensitivity there," said Saxo Bank’s head of forex strategy John Hardy. "The correlation [between moves in yields and the yen] is likely to one-to-one almost, and without any risk appetite meltdown that should continue." Global and European shares did creep higher...
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