US Yield-Curve Flattening As Long-End Failed To Climb

A sharp flattening in the U.S. government bond yield curve this week could be a bearish sign for the dollar, currency analysts say.

Yields on five-year Treasurys have shot up since last week’s Federal Reserve meeting raised the prospect of interest rates rising sooner rather than later, narrowing the gap with 30-year bond yields to their tightest spread since 2009.

Although a rise in yields at the short-end of the yield curve usually boosts the appeal of the dollar, a fall in yields at the long-end reflects concerns about the economic outlook and this is weighing on the currency, analysts say.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu