The dollar was on the defensive on Tuesday after taking a beating against peers such as the euro and yen, hurt by a sharp slide in U.S. Treasury yields as traders raised their bets for a near-term rate cut by the Federal Reserve.
The benchmark 10-year Treasury yield fell to its lowest level since September 2017 overnight, coming within reach of the 2% threshold after St. Louis Federal Reserve President James Bullard said a rate cut “may be warranted soon” given the rising risk to economic growth posed by global trade tensions as well as weak U.S. inflation.
Treasury yields had already been on a steep decline as investors have been piling into safe-haven government bonds in the face of escalating trade tensions between Washington and its trade partners.
The dollar traded little changed at 108.045 yen after brushing 107.885 overnight, its lowest since early January.
The euro nudged up 0.1% to $1.1250 after rallying roughly 0.7% overnight to $1.1262, its highest since May 13.
Source : Reuters