Morgan Stanley has reversed its U.S. dollar forecast after surging Treasury yields pushed the currency to an eight-week high. The bank now points to those rising yields and expected Federal Reserve rate hikes as the reason its earlier call on the greenback no longer holds.
Morgan Stanley has reversed its earlier U.S. dollar forecast, pointing to rising bond yields and expected Fed rate hikes as the reason its earlier call no longer holds. The reversal follows a sharp move in Treasury markets that has rippled into currencies.
Surging Treasury yields have also been in sharp focus for equity investors lately, and they have now made their mark on the foreign exchange market, helping push the U.S. dollar higher. The dollar index, which tracks the greenback against a basket of major currencies, hit an eight-week high around 101.40 this week.
The move showed up broadly across major pairs. EUR/USD rose 0.16%, GBP/USD gained 0.22% and AUD/USD advanced 0.23%, while USD/JPY fell 0.68% as the dollar strengthened against most rivals.
Behind the move, the 10-year Treasury yield stood at 5.179% and the two-year yield at 4.899%.
Source: MarketWatch (snippet-based)
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