Dollar tracks Treasury yields lower on benign US data

By Rae Wee

SINGAPORE (Reuters) -The dollar fell successful tandem with U.S. Treasury yields connected Friday aft downside surprises connected U.S. economical information this week cemented bets of much Federal Reserve complaint cuts this year.

The week started retired with a premix of marketplace tailwinds headlined by a U.S.-China commercialized truce which propelled the dollar higher, though the euphoria soon fizzled retired and near currencies trading sideways.

Most of the enactment successful the overseas speech marketplace came from the dollar's moves against the South Korean won, wherever it fell sharply for 2 consecutive days connected quality that Washington and Seoul discussed the dollar/won marketplace earlier this month.

The dollar past traded 0.14% little astatine 1,394.70 won.

"Speculation is erstwhile again mounting that President Trump favours a weaker dollar, perchance pressuring different governments to let their currencies to admit successful commercialized negotiations," said George Vessey, pb FX and macro strategist astatine Convera.

"Asian currency weakness against the dollar has agelong been seen arsenic an vantage for determination exporters, a stance the medication has sought to challenge."

In the broader market, the dollar was struggling to regain its footing aft an overnight descent pursuing information which showed U.S. shaper prices unexpectedly fell successful April.

The PPI figures came connected the heels of a tame user terms speechmaking earlier successful the week, cementing bets that the Fed is apt to chopped rates astatine slightest doubly this year.

The euro was up 0.1% to $1.1197 portion sterling steadied astatine $1.3309.

Against a handbasket of currencies, the dollar fell 0.1% to 100.70, though was connected way for a marginal play summation of 0.3% acknowledgment to its crisp 1.3% emergence connected Monday.

Markets are present pricing successful astir 56 ground points worthy of Fed cuts by December, up from 49 bps the erstwhile day.

The benchmark 10-year U.S. Treasury output extended its 7 bps driblet from overnight and was past a interaction little astatine 4.4413%. The two-year output was down 1 bp to 3.9608%.

In a intimately watched code connected Thursday, Fed Chair Jerome Powell said policymakers consciousness they request to reconsider the cardinal elements astir some jobs and ostentation successful their existent attack to monetary policy.

"Chair Powell said that the FOMC volition beryllium placing much value connected the ostentation outlook than connected employment erstwhile mounting monetary argumentation pursuing a monetary argumentation model review. This suggests a perchance higher hurdle to Fed cuts if ostentation risks stay to the upside," said Kristina Clifton, elder currency strategist astatine Commonwealth Bank of Australia.

"We forecast 3 FOMC involvement complaint cuts this year. But the risks prevarication towards little cuts if ostentation picks up."