US dollar rallies to two-week high: Time to send money from UAE?

The dollar rose to a two-week high against the yen on Tuesday as ebbing concerns about weakness in the global economy lifted US bond yields from 15-month lows.

The greenback was steady at 111.395 yen after touching 111.46, its highest since March 20.

The dollar index against a basket of six major currencies added 0.1 percent to 97.336, within close reach of a three-week high of 97.392 scaled the previous day.

US Treasuries were sold and their yields had surged overnight, with the benchmark 10-year rate rising more than 8 basis points, as encouraging manufacturing data out of the United States and China spurred some investors to scale back their holdings of safe-haven bonds.

The 10-year Treasury yield stood at 2.495 percent , pulling back from a 15-month low of 2.34 percent brushed last week when risk aversion driven by concerns towards a global economic slowdown gripped the financial markets.

“The dollar is benefiting from broader ‘risk on,’ with bonds sold and stocks being bought in light of the strong U.S. ISM data,” said Shin Kadota, senior strategist at Barclays in Tokyo.

“Seasonal flows also appear to be helping the dollar, with the currency drawing demand from participants kicking off the new quarter,” Kadota added.

The Institute for Supply Management (ISM) said on Monday that its index of national factory activity rose to 55.3 in March from 54.2 in February, which had marked the lowest level since November 2016.

The firm factory activity reading was enough to overshadow an unexpected drop in February U.S. retail sales.

The positive tone had already been set after China’s official purchasing managers’ index (PMI) released on Sunday showed factory activity unexpectedly grew for the first time in four months in March.

“We have seen a surprising succession of positive indicators emerge after excessive pessimism towards the economy dominated the markets through March,” said Mitsuo Imaizumi, chief forex strategist at Daiwa Securities.

“Dollar bears are still intact, but their resolve will be tested further by more economic indicators such as the non-manufacturing U.S. ISM reading on Wednesday and the non-farm jobs report on Friday.” The euro was down 0.1 percent at $1.1201. The single currency brushed $1.1198, its lowest since March 8, and was headed for its sixth straight day of losses.

The pound continued to move back and forth on Brexit-related developments.

Sterling last traded at $1.3075, down 0.25 percent, after the British parliament on Monday failed to agree on any alternative to Prime Minister Theresa May’s divorce deal from the European Union.

The pound had rallied on Monday on expectations that an agreement would eventually emerge, leading to some sort of a trade agreement between the European Union and Britain.

The Australian dollar edged down 0.25 percent to $0.7092 against a broadly firmer dollar.

The Aussie’s reaction to the Reserve Bank of Australia opting to leave interest rates unchanged at 1.50 percent was limited as the decision was well anticipated.

The RBA again highlighted the strength of employment, showing no immediate inclination to echo the outright dovish tone of some of its global peers.