The U.S. dollar declined in Asia on Wednesday amid geopolitical uncertainty in the Middle East, pushing U.S. Treasury yields lower.
Market participants have been betting for the dollar on the view that possible Federal Reserve rate increases would mean higher Treasury yields, which typically attract more investment, but some were trimming their bets because yields haven’t risen much, Tokyo dealers said.
The yield on the benchmark 10-year U.S. government note TMUBMUSD10Y, -0.27% fell to a three-week low of 2.243% on Tuesday, in part driven by geopolitical tensions caused by Turkey shooting down a Russian military jet along the Syrian border. It declined further to 2.234% on Wednesday in Asia.
