The US dollar fell while treasury yields eased, amid fresh tensions in the Middle East, a lack of detail in the US-China trade deal.
The US dollar slid against most major currencies, with the dollar index down about 0.3 percent to 98.6. The dollar weakened slightly against the Japanese yen to trade at 144.6, while the euro edged up 0.5 percent to US$1.148. Ten-year Treasury yields fell 5.8 basis points to 4.416 percent as the US Treasury Department saw strong interest in a US$39 billion (HK$304 billion) sale of 10-year notes on Wednesday, indicating that demand for the debt remains strong despite concerns that foreign investors are moving away from the market.
Concerns about huge US budget deficits and debt have combined with unease over the White House's shifting policies to make investors demand a higher term premium for holding Treasuries.
Traders of short-term interest-rate futures now price in a 70 percent chance of a quarter-point reduction in the Fed policy rate by September, compared with 57 percent earlier. Policymakers are widely expected to keep rates unchanged next week.
“The longer-term inflation challenge they pose remains," Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, wrote in an email. "Given the Fed likely shares that outlook, no one should be looking for rate cuts in the near future."
Gold gained 0.76 percent to US$3,347 an ounce.
REUTERS
