Dollar and euro drift, yen slips as markets seek direction

On Tuesday, the US dollar remained relatively stable as investor confidence remained tepid, prompting traders to seek higher-yielding currencies. The euro held steady at $1.1216, while the British pound gained slightly to $1.3308. The Australian dollar and New Zealand dollar both showed modest gains. Against the Japanese yen, the US dollar held steady at 158.56 yen before a scheduled auction of 20-year Japanese government bonds.

Market analyst Chris Weston noted that the improvement in risk appetite led to higher-carry currencies attracting investors. However, he pointed out that Europe's situation was less convincing, with political unrest in France and Italy weighing on the euro. French authorities introduced curfews in several cities following nationwide protests against President Emmanuel Macron.

Meanwhile, Italy deployed 500 troops following two days of unrest. ING analysts highlighted the widening spread between French and German 10-year government bonds, suggesting growing concerns over the French government's fiscal situation. Oil prices eased as traders assessed potential waivers on Russian energy and Middle East supply risks.

For the week, the 10-year Treasury bond yield remained flat at 5.131%. The US dollar index, which gauges the greenback's strength against six major currencies, ended the previous day on a two-day losing streak but recovered slightly to 101.98. Meanwhile, gold prices declined as investors weighed the Federal Reserve's interest rate outlook.

Against the Chinese yuan, the dollar remained flat at 6.6811 yuan following the People's Bank of China's decision to keep interest rates unchanged, in line with market expectations. Bitcoin prices were stable at $81,906.58, while ether increased marginally to $2,405.99.