European session review: the US dollar rose against major currencies

During today's European trading, the US dollar rose modestly, retreating from a two-week low, helped by a rise in US government bond yields after the Federal Reserve meeting. The yield on the 10-year U.S. Treasury note rose to 1.741% for the first time since January 2020, an increase of about 10 basis points.

Following the results of the March meeting, the Federal Reserve predicted an acceleration in economic growth and consumer prices in the United States this year as the COVID-19 crisis recedes, and repeated the FOMC to keep the key rate near zero in the coming years.

The ICE index, which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose by 0.32%.

"The question remains whether the Fed really deter a surge in the yield of US Treasury bonds, especially given the fact that the improvement in the fundamental performance of the United States will continue," said Valentin Marinov from Credit Agricole.

"The renewed rise in bond yields should continue to support the dollar against lower-yielding currencies such as the euro, yen and swiss franc."

The US data also had a certain impact on the dollar. According to the report from the Department of Labor, in the week ending March 13, the advance figure for seasonally adjusted initial claims was 770,000, an increase of 45,000 from the previous week's revised level. The previous week's level was revised up by 13,000 from 712,000 to 725,000. Economists had expected a decrease to 700,000. The 4-week moving average was 746,250, a decrease of 16,000 from the previous week's revised average. The previous week's average was revised up by 3,250 from 759,000 to 762,250.