Dollar Falters As U.S. Yields Retreat Amid Recession Risks

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The dollar slipped against most major peers as a decline in U.S. yields took some of the sheens off the currency. This is with investors mulling the risk of a recession from aggressive Federal Reserve rate hikes. The dollar index , which measures the greenback against six counterparts, eased 0.08% to 104.39. Giving back some of its 0.53% rally overnight, spurred mainly by weakness in the euro.

Treasury 10-year yields slid over 1 basis point in Tokyo. Trading to around 3.17% as Asian equities followed Wall Street lower. U.S. shares fell after a steep drop in U.S. consumer confidence stoked worries about a slowdown as the Fed rushes to get inflation in check.

However, the euro rose 0.11% to $1.05315 after dipping to $1.05025. This is after European Central Bank (ECB) chief Christine Lagarde offered no insight on the path. This is for interest rates at the ECB’s annual forum.

The ECB is expected to follow its global peers by raising interest rates in a decade to try to cool soaring inflation. Though economists are divided on the magnitude of any hike. The dollar slipped 0.08% to 136.04 yen , while sterling rose 0.16% to $1.2204.

Despite the decline in equities, the risk-sensitive Australian and New Zealand dollars staged small rebounds from Tuesday’s declines against the greenback. With the Aussie up 0.07% and the New Zealand dollar rising 0.18%.

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