Dollar slips lower vs. rivals, but U.S. bond yields still support

Shutterstock photo - - The dollar was broadly lower against the other major currencies on Wednesday, although demand for the greenback remained supported after the yield on the U.S. 10-year Treasury note rose to 2.64% on Tuesday, its highest in a month.

The dollar was steady, near four-month lows against the euro, with EUR/USD down 0.02% to 1.3543.

The single currency remained under pressure as borrowing costs in the euro zone have been falling in recent sessions due to diverging monetary policy between the European Central Bank and the Federal Reserve, widening the yields between some euro area government bonds and U.S. Treasuries.

The ECB cut all its main rates to record lows on Thursday and for the first time imposed negative deposit rates on commercial lenders, in a bid to tackle persistently low rates of inflation in the euro zone.

In contrast, the Fed is considering when to start raising interest rates as the economic recovery continues to gain traction.

The pound edged higher against the dollar, with GBP/USD adding 0.16% to 1.6783.

The pound strengthened after data earlier showed that the U.K. unemployment rate fell to 6.6% in the three months to April, the lowest since early 2009.

The claimant count, or number of people receiving jobless benefits fell by 27,400, ahead of forecasts for a for a decline of 25,000 people. April's figure was revised to a drop of 28,400 from 25,100.

The data added to the view that the Bank of England will raise interest rates ahead of other central banks as the economic recovery continues to deepen.

The dollar was lower against the yen, with USD/JPY shedding 0.32% to 102.03 and little changed against the Swiss franc, with USD/CHF dipping 0.01% to 0.8992.

The greenback was lower against the Australian, New Zealand and Canadian dollars, with AUD/USD up 0.22% to 0.9394, NZD/USD gaining 0.33% to 0.8556 and USD/CAD edging 0.13% lower to 1.0889.

In a report, the Westpac Banking Corporation sent consumer sentiment in Australia rose 0.2% in June, after a 6.8% decline the previous month.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.08% to 80.76. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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