The 10-year Treasury yield was little changed in Tokyo, hovering around 3.47%. That kept pressure on the yen, which tends to move inversely to U.S. long-term yields. The Japanese currency dipped at low as 136.03 per dollar before last trading flat at 135.80. The euro ticked up 0.11% to $1.08605 after dipping to a fresh five-week low of $1.08445 earlier in the session. The dollar was last up 0.31% at 19.64 Turkish lira after earlier jumping to 19.70 for the first time since March 10. Turkey headed for a runoff vote after President Tayyip Erdogan outperformed projections, holding a sizable lead over his rival but falling short of an outright majority. The U.S. currency sank 0.65% to 33.76 baht in onshore Thai trading, and earlier dipped as much as 0.92%. Thailand's opposition parties secured a stunning election win on Sunday, but it was far from certain whether they will form the next government, with parliamentary rules written by the military junta. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Kevin Buckland; Editing by Jamie Freed)
By Kevin Buckland
TOKYO, May 15 (Reuters) - The U.S. dollar rose to a
five-week high against major peers on Monday as the safe-haven
currency benefited from inflation worries at home and growth
concerns globally, extending gains after its biggest weekly
increase since September.
The Turkish lira sank to a two-month low after weekend
elections looked headed for a runoff, while the Thai baht
rallied almost 1% after Thailand's opposition routed
military-allied parties also in weekend polls.
The greenback was buoyed by a rise in Treasury yields after
a survey of U.S. consumers' long-term inflation expectations
jumped to the highest since 2011, putting a possible Federal
Reserve rate hike next month back in play.
Traders currently put those odds at 13%, from close to zero
prior to the University of Michigan's poll. However, there are
still as many as three quarter-point cuts priced into the market
by year-end. "Too many FOMC (Fed) rate cuts are priced for the near term
in our view," Joseph Capurso, head of international economics at
Commonwealth Bank of Australia (CBA), wrote in an client note.
"We acknowledge there are tentative signs the U.S. labour
market is cooling and underlying inflation is easing, (which)
imply a high bar to rate hikes," he added. "But the still-high
inflation and tight labour market also imply a high bar to rate
cuts in the near term too."
China, meanwhile, is at the centre of renewed worries about
a global recession after a spate of disappointing economic data
including imports and inflation pointed to tepid domestic
demand. More evidence could come from Tuesday's retail sales
report.
The Chinese yuan dipped to a fresh two-month low of 6.9740
per dollar in offshore trading on Monday before coming
back slightly to 6.9694.
The People's Bank of China kept its seven-day reverse repo
rate unchanged at 2%.
The dollar index , which measures the currency against
six major peers, reached 102.75 for the first time since April
10 in early Asian trading before then easing slightly to 102.63.
It rallied 1.4% last week.
The U.S. dollar is oversold and the dollar index should move
toward CBA's end-June target of 104 this week, Capurso said.
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