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U.S. bond yields, factory data boost dollar
November 3, 2015 / 4:11 AM / 2 years ago

U.S. bond yields, factory data boost dollar

NEW YORK (Reuters) - The dollar edged higher on Tuesday, spurred by rising U.S. bond yields and generally in-line U.S. economic data that fed investor expectations for a Federal Reserve interest rate hike before year end.

Arrangement of various world currencies including Chinese Yuan, Japanese Yen, US Dollar, Euro, British Pound, Swiss Franc and Russian Ruble pictured in Warsaw January 26, 2011. REUTERS/Kacper Pempel

The greenback rose 0.6 percent to trade at $1.0945 against the euro and was up 0.3 percent against the yen to 121.16 yen per dollar.

The dollar index .DXY retreated after approaching a 12-week high in the morning, but remained up for the day. The index, which measures the greenback against a basket of major currencies, was last up 0.42 percent at 97.330.

The U.S. currency has been in a steady uptrend for the last few weeks as investors anticipate higher rates in the United States while other world central banks engage in more stimulus.

Shorter-dated U.S. Treasuries yields climbed to their highest levels in more than six weeks on bets that Friday’s U.S. payrolls data for October will be strong enough for the Fed to hike rates at its Dec. 15-16 meeting.

A woman counts U.S. dollars at a money changer in Yangon May 23, 2013. REUTERS/Soe Zeya Tun

“You’ve got the payroll (report) this Friday so you can see some people are positioning ahead of that,” said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Limited in New York.

U.S. manufacturing orders fell 1 percent in September, but non-defense capital goods excluding aircraft, a measure of business spending, slipped 0.1 percent, better than the initial 0.3 percent drop reported last week, suggesting the worst of the manufacturing slump could be over.

Automakers in the United States reported strong sales growth last month with car sales on track to reach their highest October sales volume since 2001

Bucking the trend, the Australian dollar gained 0.74 percent against the U.S. dollar to $0.7196 AUD=D4 after the Reserve Bank of Australia announced it would leave interest rates unchanged.

The Brazilian real and Colombian peso both made sizeable inroads against the dollar after central bankers in both countries intervened in the foreign exchange market. The real was last up 2 percent at 3.77 BRL= reais per dollar and the peso rose 3.35 percent to 2788.70 COP= pesos to a dollar.

In the world of web-based "cryptocurrencies," bitcoin reached a session high of $411.15 BTC=BTSP on the Bitstamp exchange on Tuesday, its highest in 11 months. The digital currency had been edging downward since November 2013 when it hit an all-time high of $1,163. But it has gained more than 80 percent since dipping below $200 in late August.

Additional reporting by Jemima Kelly in London, Ian Chua in Sydney and Shinichi Saoshiro in Tokyo; Editing by Paul Simao

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