Dollar Dips on Disappointing US Yields

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1. Dollar Dips on Disappointing US Yields
The USD’s recent rally seems to have finally ran out of steam as this morning the dollar retreated against its major rivals on the back of sagging U.S. yields. Koji Fukaya, president at FPG Securities in Tokyo stated that in order for the dollar rally to resume, the Fed would need to hike rates as early as June while the 10-year Treasury yield would need to build a firm foothold above 3 percent. Meanwhile, the euro recovered from multi-month lows seen last week while the Canadian Dollar (CAD) continued to edge higher as oil prices climbed and prospects improved for greater deal making in Canada’s energy sector.*

2. Oil Shies Away From Multi-Year Highs
Oil prices fell away from last week’s multi-year highs this morning, as a relentless rise in U.S. drilling activity pointed to increased output. U.S. West Texas Intermediate (USOIL) crude futures were last seen trading at $70.33 a barrel, down 37 cents, or 0.5 percent from their last settlement. Last week USOIL reached its highest since November 2014 at $71.89 per barrel, as markets expected Iran’s oil exports to fall significantly on looming U.S. sanctions. However, Germany has said that it would protect its companies from U.S. sanctions, while Iran has stated that French oil giant Total has yet to pull out of its fields. For now it seems that Europe is willing to defend Iran and oppose the U.S. sanctions which is expected to continue to drag on oil price throughout the week.**

3. Gold Prices Rise on Weaker Dollar
Gold (XAUUSD) prices rose on the back of a weaker dollar in early Monday as trading , after marking a two week high at $1,325.96 in the previous session. This morning Spot gold steadied at $1,321.00 per ounce at 7:00 GMT while the dollar index eased 0.1 percent at 92.426, with its recent rally running out of steam on the back of sagging U.S. yields.***

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*Source: CNBC

**Source: Reuters

***Source: Investing

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