Asian session review: the US dollar rose against most currencies

During today's Asian trading, the US dollar rose against the euro and the pound, but declined against the yen.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.35%.

The dollar is supported by the flight of investors from risks on the background of rising US Treasury yields: the yield on ten-year US Treasuries on Thursday rose above 1.6% for the first time in a year. By the close of the market, the yield of securities was 1.525%, on Friday it fell to 1.477%.

The growth in the yields of US government securities traditionally supports the dollar: the higher the rates, the more attractive the US currency is for buyers. At the same time, it is a wake-up call for risky assets that have largely benefited from exceptionally soft financial conditions during the coronavirus pandemic.

Forecasts of a faster-than-expected economic recovery are fueling concerns about the possibility of faster inflation in the United States, which could push the Federal Reserve to raise its benchmark interest rate.

The Federal Reserve does not yet expect US inflation to increase "to alarming levels," Fed Chairman Jerome Powell said earlier this week.

Meanwhile, Federal Reserve Bank of Kansas City President Esther George warned that U.S. inflation could accelerate rapidly when more Americans are vaccinated against COVID-19.