The dollar pushes higher alongside US yields to start the week

Here’s what you need to know on Monday, March 28:

The greenback is strengthening against its main rivals at the start of the week, supported by rising US Treasury yields. The negative shift seen in risk sentiment is also giving the dollar an additional boost. February trade balance data and the Texas manufacturing survey from the Federal Reserve Bank of Dallas will appear in the US economic record on Monday. Bank of England Governor Andrew Bailey is also due to deliver a speech during European trading hours.

On Sunday, China announced that a two-phase lockdown for Shanghai had been launched amid rising numbers of coronavirus infections. Meanwhile, Ukrainian President Volodymyr Zelenskyy said he would insist on sovereignty and territorial integrity in the next round of talks with Russia. U.S. stock index futures fell between 0.4% and 0.5% early Monday, reflecting poor market sentiment.

After the Bank of Japan announced during the Asian session that it will offer to buy an unlimited number of Japanese 10-year government bonds at 0.25%, USD/JPY hit its highest level since December 2015. The pair was last seen rising nearly 1% on a daily basis above 123.00.

EUR/USD remains on the back foot after closing the previous three trading days in negative territory and is trading in negative territory below 1.1000. Earlier in the day, European Central Bank President Christine Lagarde noted that incoming data did not indicate a significant risk of stagflation. “In all scenarios, inflation is expected to decline and settle at levels close to the bank’s 2% target in 2024,” Lagarde added.

GBP/USD fell to a new six-day low at 1.3131 early Monday before bouncing back towards 1.3150. BOE Governor Bailey’s speech at 11:00 GMT is titled “Macroeconomic and Financial Stability in Times of Change”.

Gold fell sharply to start the week amid rising US Treasury bond yields. The benchmark 10-year US Treasury yield is up more than 1% to 2.5% early Monday and XAU/USD is down 1.2% to $1,935.

Bitcoin gained more than 5% on Sunday and touched its highest level since late December at $47,694 before falling back to $47,000 in the early European morning. Ethereum is trading at its highest level in more than two months at $3,300 after rising 15% in the past week.