Investing.com - The euro continued to slide against a
strengthening dollar on Tuesday, as yields in U.S. government debt
continued to rise, a sign that markets may be pricing in the
possibility that the Federal Reserve may hike interest rates sooner
than once anticipated.
In U.S. trading, EUR/USD was down 0.38% at 1.3541, up from a
session low of 1.3534 and off a high of 1.3602.
The pair was likely to find support at 1.3503, Thursday's low,
and resistance at 1.3677, Friday's high.
Rising Treasury yields, four months of solid monthly jobs
reports and other upbeat economic indicators in the U.S. sent
investors chasing the dollar on Tuesday.
On Friday, the U.S. Labor Department reported that the economy
added 217,000 in May, close to expectations for a 218,000
It was the fourth consecutive month in which the U.S. economy
added more than 200,000 new nonfarm payrolls.
The private sector added 216,000 jobs last month, exceeding
expectations for a 210,000 gain.
Meanwhile, Treasury yields in the U.S. continued to rise on
expectations that Thursday's retail sales report will come in
strong, prompting investors to reevaluate when the Federal Reserve
will hike interest rates.
Fed officials have said some time will pass between the time
monetary authorities wrap up stimulus programs, currently seen
taking place at the end of this year, and when interest rates rise,
forecast to take place sometime in 2015, though the timing of such
still remains up in the air.
The yield on the U.S. U.S. 10-Year Treasury note rose to 2.65%
on Tuesday, its highest in a month.
The euro, meanwhile, came under pressure on sentiments that
policy will remain accommodative for the foreseeable future.
Last Thursday, the ECB unveiled a package of measures to battle
persistently low inflation rates in the euro area, including cuts
to interest rates, though markets still haven't rule out further
action if inflation rates don't pick up.
Elsewhere, the euro was down against the pound, with EUR/GBP
down 0.07% at 0.8084, and down against the yen, with EUR/JPY down
0.44% at 138.74.
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