US Dollar Index and Treasury Yields Early on February 2
US Dollar Index
The US Dollar Index declined for six consecutive trading weeks and closed last week at fresh three-year low price levels. The US Dollar Index started this week on a stronger note by rebounding from multiyear lows on Monday. However, the US Dollar Index resumed its weakness and declined for the next three days. On February 2, the US Dollar Index started on a stable note and traded above opening prices in the early hours.
Interested in TTT? Don't miss the next report.
Receive e-mail alerts for new research on TTT
Despite supporting factors like the end of the US government shutdown and bullish comments by President Trump, the US Dollar Index didn’t regain strength last week. Generally, a surge in Treasury yields boosts the US Dollar Index. Despite Treasury yields’ strong rally, the US Dollar Index continued to move lower. The market is waiting for the release of the non-farm payrolls report scheduled to release at 8:30 AM EST today.
At 4:00 AM EST on February 2, the US Dollar Index was trading at 88.81—a gain of 0.16%.
US Treasury yields
The US bond sell-off continued on Friday amid the improved global market sentiment. The expectations of an increase in the US deficit amid the new tax code and increased inflation are the main reasons behind the bond market’s sell-off. Yields move opposite to bonds.
Below are the movements in Treasury yields as of 4:05 AM EST on February 2.
- The ten-year Treasury yield was trading at 2.800—a rise of ~0.96%.
- The 30-year Treasury yield was trading at 3.046—a rise of ~1.32%.
- The five-year Treasury yield was trading at 2.578—a rise of ~0.75%.
- The two-year Treasury yield was trading at 2.170—a rise of ~0.40%.
The iShares 20+ Year Treasury Bond (TLT) fell 1.5%. The ProShares UltraPro Short 20+ Year Treasury (TTT) and the ProShares UltraShort 20+ Year Treasury (TBT) rose 4.5% and 3.0%, respectively, on February 1.
After declining for three trading weeks, Bitcoin started this week on a weaker note and fell as the week progressed. Increased regulatory pressures from Asian markets along with the decreased risk appetite among cryptocurrency investors weighed on Bitcoin this week. At 4:15 AM EST, the Bitcoin-US Dollar contract was trading at $8,455.5—a fall of 14.7%.
Next, we’ll discuss how commodities performed in the early hours on February 2.