© Reuters. The u.s. dollar is advancing on Monday
Investing.com – The dollar has reached new heights this year, trade tensions between the United States and China have been alleviated.
The dollar index, which measures the greenback’s strength versus a weighted basket based on the trade of six major currencies, rose 0.28% 93,84 at 5: 27 a.m. EDT (9h27 GMT).
The trade war between the United States and China is on hold as the two parties are working on a trade deal, said on Sunday the u.s. secretary of the Treasury, Steven Mnuchin. The two countries were engaged in a disagreement the disagreements tariff in recent months. However, China has yet to agree to reduce the trade deficit despite the request of president Donald Trump as the second largest economy in the world to reduce its trade surplus of $ 200 billion.
The greenback was also supported by bond yields reaching a peak of seven years. The yield on the Treasury bond of reference amounted to 3,076 after reaching a high of 3,882.
The increase in bond yields, coupled with the economic data positive and rising inflation, has strengthened forecasts that the federal Reserve will increase interest rates and will tighten the monetary policy.
The Fed has raised its rates in march and is expected to increase its rates two times more, some investors expect even a third increase.
Expectations of rising interest rates tend to boost the dollar, making the currency more attractive for investors in search of yield.
The us dollar appreciated against the yen, with a rise of the USD / JPY of + 0.48 per cent to 111,29.
The euro is down because of the political uncertainty in Italy and a massive sale of shares, with EUR/USD down 0.30% to 1,1735.
The british pound was also lower in the uncertainty surrounding talks on the Brexit. The GBP / USD down 0.50% to 1,3403.
During this time, the canadian dollar is advancing, with the USD / CAD sliding 0.16% to 1,2863.
Elsewhere, the australian dollar declined, with an increase of 0.16% to 0,7522 for the AUD / USD, while the NZD / USD was down 0.27% to 0,6896.