Search ForexCrunch

The massive US fiscal deficit is pushing Treasury yields higher and drawing bids for the US dollar, according to Robin Brooks, Chief Economist at the Institute of International Finance (IIF), and former managing director of foreign exchange strategy at Goldman Sachs. 

“The Dollar fall vs other G10 currencies is ending, due to rising longer-term US yields. The US fiscal largesse is dollar positive,” Brooks tweeted on Thursday. 

The dollar index, which tracks the greenback’s value against majors, witnessed a recovery rally from the two-year low of 91.75 to 94.74 in September and was last seen at 93.45. 

The index reached a high of 102.99 during the height of the coronavirus panic in financial markets in March.