Dollar Little Changed as Treasury Yields Fall, Economic Data Disappoints Business & Finance

• Unemployment insurance claims, home sales data disappoints

• Jump in cryptocurrencies

NEW YORK: The dollar pared its earlier gains on Thursday as the bullish trajectory for US Treasury yields this week took a break. The greenback edged lower after weekly jobless claims unexpectedly hit a three-month high.

A separate report showed that US second-hand home sales fell 4.6% in December, more than analysts expected.

“The dollar has been weak this year,” said Marc Chandler, chief market strategist at Bannockburn Forex in New York. “The US economy is facing some big headwinds, which is why I’m not as progressive as others at the Fed.”

“There are so many tightenings ahead, and the economy looks a bit more vulnerable to me than a lot of people expected,” Chandler added. “That means the dollar is going to have a tougher second half than the first.”

Yields on US benchmark 10-year bonds were at 1.8308%, above their two-year high of 1.902% hit on Wednesday.

This advance was fueled by market expectations that the US Federal Reserve will tighten monetary policy at a faster pace than expected. Fed funds futures have fully priced in a rate hike in March and a total of four in 2022.

“The big focus is next week’s FOMC meeting and the market will probably be cautious heading into the weekend, and that’s due to the geopolitical uncertainty on the Ukrainian border,” Chandler said, referring to the Federal Open Market Committee.

The euro was last at $1.1311, below an earlier high of $1.1369.

The pound was up 0.15% at $1.3636 and the yen was nominally lower at 114.11 to the dollar.

The Aussie strengthened 0.64% to $0.7257, extending advances from the previous day, and the Canadian dollar pared its earlier gains, with the US dollar worth C$1.2483.

The Norwegian krone fell after the central bank voted to keep interest rates at 0.5% and said it was on track for an interest rate hike in March.

The krone last fell almost 0.2% against the euro and the dollar.

Among cryptocurrencies, bitcoin recently rose 3.6% to $43,182, while smaller rival Ether gained 5.5% to $3,249.

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