The U.S. dollar held steady on Wednesday, regaining some ground after a sell-off in long-term global bonds pressured other major currencies.
Heightened fiscal concerns in the U.S., Japan, and other economies have pushed longer-dated bond yields higher, a trend that typically moves inversely to prices.
Yields appear to be stabilizing, particularly in Europe, though German and French government bonds remain near multi-year peaks. Japanese bond yields also touched record levels this week.
By 04:52 ET (08:52 GMT), the U.S. dollar index, which tracks the greenback against a basket of currencies, remained around 98.36.
The British pound traded mostly flat at $1.3392 after dipping to a three-and-a-half-week low in the previous session, while the euro nudged up 0.1% to $1.1656. The dollar rose slightly to 148.65 yen, despite strong Japanese data showing accelerated growth in manufacturing and services in August. Earlier this week, the greenback had reached its highest level against the yen since August 1.
Investors remain cautious in Asia, monitoring a legal challenge to U.S. President Donald Trump’s broad tariff measures, which could compel Washington to reconsider recent trade agreements.
“Yesterday’s dollar rally lacked a clear catalyst beyond the selloff in global long-dated bonds,” analysts at ING said in a note to clients. “Still, we doubt this will provide sustainable support to the dollar ahead of key data releases and imminent Fed easing.”
Markets are focused on upcoming U.S. economic indicators this week, notably the August nonfarm payrolls report on Friday. Additional data on job openings and private-sector hiring will provide the Fed with important guidance ahead of its policy meeting on September 16-17.
Analysts note that Fed Chair Jerome Powell appears prioritizing labor market support over inflation concerns, fueling expectations that the central bank may reduce interest rates during its upcoming meeting.
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