NEW YORK (CNN/Money) - Treasury prices climbed and the dollar hovered near eight-month lows against the euro Friday afternoon as traders worried about how soaring oil prices will affect the U.S. economy.
In the bond market, the benchmark 10-year note added 7/32 to 102-5/32 to yield 3.98 percent, little changed from 3.99 late Thursday, and the 30-year bond rose 8/32 to 109-7/32 to yield 4.75 percent, down from Thursday's late level of 4.77 percent.
The two-year note edged higher 2/32 to 99-30/32 to yield 2.51 percent, and the five-year note advanced 4/32 of a point to 100-17/32 to yield 3.25 percent. Bond prices and yields move in opposite directions.
Oil priced closed at a record high above $55 Friday on the New York Mercantile Exchange, with the December contract hitting $55.17.
Even though Federal Reserve officials have not said rising energy prices would affect interest rate tightening, Fed Governor Ben Bernanke said Thursday that the recent spike in crude prices was large enough to present a significant economic shock.
"The message from Bernanke and Yellen has been that rising oil prices certainly are not going to speed up any efforts by the Fed to raise rates," Steve Gallagher, U.S. chief economist at SG Corporate and Investment Banking in New York, told Reuters. "That leaves the potential that it could slow (rate tightening) down," he said.
"We are not too sure where the oil prices are going to stop and we don't have a good idea how long they are going to remain at these types of levels," Gallagher added.
The dollar reached an eight-month low against the euro in intraday trade at $1.2658 amid concerns about the U.S. economy and its ability to attract global investors. At around 4:30 p.m. ET, the euro bought $1.2653, up from $26.18 late Thursday.
The greenback also fell further against the yen Friday, buying ¥107.30, down from ¥107.45 late Thursday.
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