By Terence Hove, Financial Markets Strategist Consultant to Exness
The US dollar extended its decline on Tuesday, following losses in the previous session, as escalating tensions between Washington and Europe undermined confidence in US assets. The renewed pressure comes amid the controversy surrounding President Donald Trump’s intentions toward Greenland. In addition, a fresh wave of trade threats has fuelled renewed concerns about the impact on the global economy.
Against this backdrop, treasury yields rose sharply across the curve, reflecting investors’ caution and receding demand for US assets. The 10-year yield climbed above 4.28%, reaching its highest level since last September, underscoring rising risk premia attached to dollar-denominated assets.
Looking ahead, investors are turning their attention to a heavy US data calendar, including PCE inflation, third-quarter GDP and the University of Michigan consumer sentiment survey. Today’s ADP employment data will also be monitored, though unless the figures deliver an extreme surprise, market reactions are likely to remain muted. For now, geopolitical developments and the trajectory of US-Europe tensions dominate sentiment for both the dollar and Treasury yields.