NEW YORK (CNN/Money) -
The dollar erased early losses in late afternoon trading Tuesday, after hitting a new three-year low versus the yen earlier in the day.
At around 4:10 p.m. ET, the dollar bought ¥112.18, up from ¥112.13 late Monday. The dollar also recouped its loses against the euro, which slipped to $1.1451 from $1.1472 late Monday.
The dollar had hit a new three-year low of ¥110.93 earlier in the session, in the wake of weekend comments from the Group of 7 (G7) major industrial nations calling for more exchange rate flexibility as a means to help iron out global economic imbalances. Markets viewed the statement as criticism of persistent intervention by Asian countries, particularly China and Japan, to keep their currencies weak for the benefit of their export markets.
The widening of exchange rates could have a negative impact for U.S. bonds, since Asian central banks have been massive buyers of Treasurys and agency debt in recent years. Traders said there are concerns that they may scale back their purchases of U.S. debt.
Meanwhile, Treasury prices received a slight lift Tuesday from a report showing a drop in weekly retail sales, and from comments by a Fed official saying that the weak labor sector still posed a risk for recovery.
At around 4:10 p.m. ET, the benchmark 10-year Treasury note picked up 4/32 of a point in price to 100-11/32, yielding 4.20 percent, down from 4.24 percent late Monday. The 30-year bond gained 19/32 of a point to 104-6/32, its yield falling to 5.09 percent from 5.14 percent late Monday.
The five-year note rose 1/32 of a point to 100-even, yielding 3.12 percent. The two-year note also rose 1/32 of a point to 100-21/32, yielding 1.65 percent. Bond yields and prices move in opposite directions.
The bond market had little economic news to focus on, though a current reading on retail sales shows a steep fall last week as Hurricane Isabel swept through the East Coast and tax-rebate spending dwindled.
Comments from Richmond Federal Reserve Bank President Alfred Broaddus also helped bonds find steadier footing.
Broaddus said growth should rise to around a 4.5 percent annual rate in the current quarter and near a solid 4 percent pace through next year. He warned, however, that the economy needed to begin generating jobs to ensure the recovery's sustainability that pushed Treasury's higher.
-- from staff and wire reports
|
