The US dollar strengthened, while the yields on the treasury bonds lost some of yesterday’s winnings, after the President Donald Tramp announced the possible introduction of a customs from about 100% to the goods from Russia – if Moscow does not suspend the war in Ukraine in the next 50 days.
The news was published on Monday around the floor in the eastern American time, after which the WSJ Dollar Index has grown additionally. It is currently in the plus 0.2%, with the dollar strengthened 0.4% compared to yen and 0.1% compared to the euro.
Meanwhile, yields on American government bonds returned part of the morning winnings and are now mostly stable compared to Friday. The yield on a ten-year-old bond is 4,424%, while two years of 3,896%.
Euro could strengthen up to $ 1.40 in the long run, compared to the current 1,1688, the Analysts of BCA Research state. This forecast is based on an increasing gap between the income statement deficit and the eurozone surplus, investor me.
Although short-term consolidation of the euro exchange rate, due to the exporter pressure, after the recent currency, the long-term trend remains positive, according to the analyst’s note.
Rising concerns about the sustainability of the current account of the United States, while the political risks grow, is aggravated by a net international investment position, and support through income balance is declining, which increases the investor interest to fund the American deficit.
“In contrast, the external position of the eurozone is strong and less dependent on short-term capital flows,” they conclude from BCA Research.
