U.S. Dollar Spikes Up Against Majors

09:46, 20th April 2015

(RTTNews) - The U.S. dollar gained ground on Monday, as U.S. treasury yields rose after China announced stimulus measures to provide more liquidity into the financial system.

On Sunday, the People's Bank of China lowered the banks' reserve requirement ratio to 18.5 percent. This was the second reduction this year, an action taken after the economy logged its weakest growth in six years.

Yields on U.S. 30-year treasury note rose 2.53 percent, while that of 10-year note advanced 1.87 percent. Yields rise when bond prices fall.

With today's economic calendar being very thin, corporate earning results could set the tone for the markets.

After some string of soft data last week, traders await U.S. durable goods orders report and new home sales report, the National Association of Realtors' existing home sales report, the weekly jobless claims report and Markit's flash manufacturing purchasing managers' index for April this week for more clues about the timing of U.S. rate hike.

The dollar ended Friday's deals in a negative territory, although it showed a modest rebound after U.S. consumer inflation data. The currency fell by 2.81 percent against the franc, 1.06 percent against the yen, 1.90 percent against the euro and 2.24 percent against the pound for the week.

The greenback rebounded to 119.13 against the Japanese yen, off early low of 118.52. The next possible resistance for the greenback-yen pair is seen around the 120.00 zone.

The greenback climbed to 4-day highs of 1.4887 against the Sterling and 0.9598 against the Swiss franc, reversing from early lows of 1.4983 and 0.9499, respectively. If the greenback extends advance, it may find resistance around 0.97 against the franc and 1.48 against the pound.

The greenback rebounded from early lows of 1.0819 against the euro and 0.7826 against the aussie and hit 4-day highs of 1.0711 and 0.7753, respectively. Continuation of the greenback's uptrend may lead to resistance levels of around 1.06 against the euro and 0.77 against the aussie.

The greenback edged up to 0.7670 against the kiwi and 1.2259 against the loonie, from its previous lows of 0.7723 and 1.2180, respectively. The greenback may possibly find resistance around 0.76 versus the kiwi and 1.25 against the loonie.

Looking ahead, Bank of Canada Governor Stephen Poloz will participate in a panel discussion at the Bloomberg Americas Monetary Summit, in New York at 10:05 am ET.