Dollar slides versus pound, euro as bond yields rally
Sterling jumped on Tuesday to the strongest point this month compared to the dollar after statistics showed inflation in the United Kingdom leaped in February to 2.3%, topping the Bank of England's target 2% rate for the first time since 2013. The euro also advanced compared to the greenback, on the wings of confidence French centrist candidate Emmanuel Macron is set to beat the far-right National Front's leader Marine Le Pen in the presidential election runoff.
Meanwhile, the currency of the United States suffered downward pressure as yesterday Charles Evans, head of the Federal Reserve Bank of Chicago, warned of uncertainty in relation to the fiscal boost in President Donald Trump's agenda. He signaled massive tax cuts could overheat the economy, prompting rapid monetary policy tightening, but on the other hand the central banker also played down the possibility for the Fed to increase interest rates more than two times before the end of the year.
The pound jumped 0.87% to $1.2467 at 1:06 pm CET, after touching $1.2474, a level unseen since February 27. The euro was up 0.62% at $1.08065, testing the highest value since December 8. The joint currency retreated 0.19% to £0.86734.
The yields on British and German five-year government debt jumped 6.4 and 5.9 basis points, respectively, to 0.655% and a negative level of 0.269%. The US Treasury's note with maturity of five years declined, boosting the yield by 2.4 points to 2.017% (all 12:56 pm CET).