Dollar gains traction on rising US T-bond yields

The benchmark 10-year US Treasury bond yield continues its march toward the key 2% mark early Tuesday, helping the greenback preserve strength against its major rivals. December Trade Balance, NIFB Business Optimism Index and the IBD/TIPP Economic Optimism Index data will be featured in the US economic docket in the second half of the day. Meanwhile, US stocks futures are trading in the negative territory after posting modest losses on Monday.

Crude oil prices seem to have gone into a consolidation phase following last week’s upsurge. The barrel of West Texas Intermediate (WTI), which touched its highest level since September 2014 at $93.13 on Friday, was last seen trading flat on the day near $91.50. Talks on bringing back the 2015 Iran nuclear deal is set to continue in Vienna on Tuesday.

EUR/USD is edging lower toward 1.1400 on renewed dollar strength and European Central Bank President Christine Lagarde’s comments. While speaking before the EU Parliament, Lagarde said that there were no signs of inflation measurably exceeding the 2% target in the medium term. “We need more than ever to maintain flexibility and optionality in the conduct of monetary policy,” Lagarde repeated.

GBP/USD closed flat after testing 1.3500 on Monday and continues to trade in a very narrow range on Tuesday.

USD/JPY is trading at its highest level in more than a week at 115.50, supported by rising US T-bond yields.

Gold advanced to its strongest level in 10 days above $1,820 on Monday. XAU/USD is having a tough time gathering bullish momentum early Tuesday.

AUD/USD stays quiet above 0.7100 after rising decisively on Monday. During the Asian trading hours, the data published by the National Australia Bank showed that Business Confidence Index improved to 3 in January from -12 in December.

Bitcoin keeps its footing after breaking above $40,000 and was last seen rising more than 2% on a daily basis at $44,750. Ethereum is trading at its highest level since January to at $3,180, rising more than 1% on the day.

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