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US dollar declines amid falling government bond yields

The US dollar fell against major rivals in the European session on Monday, as US Treasury yields declined amid growing hopes that the Fed would keep interest rates near zero for longer.

The yield on 10-year US Treasuries fell to multi-week lows hit last week after the US Federal Reserve confirmed that any spike in inflation was likely to be temporary.

Christopher Waller, the new governor of the Washington Federal Reserve Board, said Friday that any accompanying spike in inflation would be short-term, confirming the sentiment of most US central banks.

Half of the US adult population received at least one dose of COVID-19 vaccine, another step in a successful vaccination campaign.

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The US dollar index fell to 91.13, its lowest level in more than a month.

The greenback fell to 1-1 / 2-month lows of 0.9129 against the franc and 1.2048 against the euro from early highs of 0.9215 and 5-day highs of 1.1943, respectively. The US dollar is likely to test support around 0.88 against the franc and 1.24 against the euro if it falls further.

The greenback hit 1.3927 against the pound, its weakest since March 19, while hitting a 1-1 / 2-month low of 108.01 against the yen. The US dollar will meet support at 1.40 against the pound and 106.00 against the yen.

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The US dollar is down to nearly 5-week lows of 1.2471 against the Canadian dollar, 0.7785 against the Aussie and 0.7198 against the NZ dollar, from its early highs of 1.2529, 4-day highs of 0.7706 and 5-day highs 0.7122 respectively. The next key support for the US dollar is seen at 1.21 against the Canadian dollar, 0.79 against the Australian dollar and 0.74 against the NZ dollar.

At 8:15 am ET, Canada’s new home starts for March will be released.

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