King Dollar is back again as bond yields rally

Vrasidas Neofytou
Head of Investment Research

See all articles

King dollar shines again. The world’s reserve currency advanced 3% so far in 2021, on the back of rising US bond yields, vaccine rollouts, and the expectations for a faster reopening of the US economy as it emerges from the pandemic.

The bond yields climbed to a one-year high across all maturities, increasing the demand for the US currency. Investors have already priced in higher inflation figures, driven by the massive fiscal and monetary packages, and the higher commodities prices.

The DXY dollar index rose near the 92.50 marks, its highest level since late November 2020. The dollar gained almost 500 pips against Euro, trading near the 1.18 mark, while it rose to a 9-month high against the safe-haven currencies of the Japanese Yen and Swiss Franc.

The greenback has also managed to recover some losses against commodity-linked currencies such as the Australian and New Zealand dollars, and emerging market currencies of Turkish Lira, Brazilian Real, and Chinese Yuan.

The continuing rally in the dollar and bond yields have also pressured the price of Gold below 1.700 dollars per ounce, as they increase the opportunity cost of holding the non-interest precious metal.

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Exclusive Capital communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

Read our detailed Marketing Communication Disclaimer

SHARE

CONNECT WITH OUR TEAM

Explore the ways in which we can help you achieve your investment goals.

OUR PARTNERS
bdo

EXTERNAL AUDITOR

ey

LEGAL ADVISOR

lgt

CUSTODIAN BANK

efg

APPROVED PARTNER

Raiffeisen

DEPOSITORY BANK

Prime Fund

GROUP MEMBER