The dollar plunged for the fifth consecutive day against the yen today, weighed by the decline in U.S. Treasury yields. The 10-year Treasury bond yields plunged to 2.53 percent from 2.55 percent on Monday.
The Australian dollar tumbled the most today after iron ore prices plunged. Iron ore is the country’s largest foreign exchange earner.
However, the greenback’s upward momentum against the Aussie failed to boost it versus the yen.
“The strong correlation between dollar/yen and Treasury yields continue to be the main driver,” Joe Manimbo, a Washington-based senior market analyst, at Western Union Business Solutions told Reuters. “Part of that is due to renewed concerns about the health of the global economy and also Wall Street is off to a slow start.”
The dollar edged 0.3 percent lower to trade at 101.26 yen in mid-morning trade. The Aussie declined 0.8 percent to US$0.9258. It had earlier plunged to US$0.9251, its weakest since May 5. The euro declined 0.1 percent versus the dollar to $1.3690.
The Australian dollar has remained strong since its weak performance in late January, though fears over declining investor inflows into the country and China’s economic slowdown indicates possibility of slower economic growth in Australia.
The euro shook as investors fretted over the European Parliament elections, which are characterised by euro-sceptic and anti-austerity talks, which are due this week. The shared currency has also taken a hit from speculation that the European Central Bank may ease its monetary policy soon. These aggressive policies include negative interest rates and asset purchases. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at firstname.lastname@example.org