Dollar held 3-weeks highs
The dollar remained close to the three-week highs on Tuesday as a decline in market volatility increased the demand for riskier assets.
With the 10-year US Treasury yields rising by more than 20 basis points over the last four weeks to one month’s high, demand for US-denominated assets is on the rise.
The broader market movements were quiet as the financial markets were opened after the Easter holiday.
The dollar index against a basket of six key rivals rose to 97.39, edging toward the 2019 high of 97.71 struck in early March.
“We are in a very range-bound market with the broader picture being more positive for the dollar relative to the euro after the weak eurozone PMI manufacturing data last week,” said Ulrich Leuchtmann, head of FX strategy at Commerzbank.
Data released overnight showed that existing home sales in the US dropped more than expected in March. Figures for new home sales will be released later in the day.
They can provide some insights into the state of the US economy. A clearer picture should come from the gross domestic product report, which should be released on Friday.
Support for the dollar came amid a general decline in market volatility. Expected changes in the EUR / USD exchange rate for a one-month period, held near a five-year low of 4.50 vol.
The dollar’s moves against the euro and sterling were small, with the single currency lower at $1.1243 and the pound up at $1.2986.