By: Barbara Zigah
The U.S. Dollar rose in Asian trading today, briefly striking a 6-week peak versus the common currency in Euro before it slipped back. As reported at 2:48 p .m. (JST) in Tokyo, the U.S Dollar was trading as high as $1.3560 just prior to dovish comments made by two Federal Reserve officials, thereafter, it retreated to $1.3612.
Those comments were seen as an attempt to temper the recent rise of U.S. Treasury instruments; on Monday the yield on the 10-year U.S. Treasury note rose approximately 17 basis points, coming close to a 3-month peak of 2.97% and broadly lifting the U.S. Dollar. Likewise, the comments by Janet Yellen, the Federal Reserve Bank Vice Chairwoman and William Dudley, President of the New York branch of the Federal Reserve Bank, were also aimed at fending off recent criticisms about the Federal Reserve’s $600 billion quantitative easing scheme.
The Euro, meanwhile, is being pressured by growing concerns over peripheral Eurozone debt, especially as it pertains to Ireland. For the time being, Dublin is balking over the need for financial assistance to reign in its massive deficit, though it has been alleged that government officials are meeting with E.U. officials to explore possible options.
Analysts suggest that Ireland should move sooner rather than later, as the Euro is highly vulnerable, especially as the year end draws near and the need for dollar short covering grows.