Economist's Insights

Today’s Trading Activity – Dollar’s Slide Picks Up Pace in Worst Daily Performance Since June 2017

Jan 24, 2018

After a day of ups and downs, U.S. stocks closed mixed Wednesday as a rout in tech shares led the Nasdaq to a 0.61% drop. The tech sector was also the biggest drag on the S&P but gains in financials and other sectors left the broader index hardly changed (-0.06%). The Dow managed to edge 0.16% higher which was enough to give the index its second record close of the week. Treasury yields held an overnight rise but, on net, did very little during the actual U.S. session. The 2-year yield finished 2.6 bps higher at 2.076%, a new high for the cycle. The 5-year yield added 2.2 bps to 2.574% after a $34B auction produced average results: best bid-to-cover since September, highest awarded yield since April 2010, but average allocation splits between primaries, directs, and indirects. The 10-year yield rose 3.3 bps to 2.647%. The Dollar’s ceaseless decline, however, continued to be one of the most talked about market stories. The greenback closed at its lowest level since December 2014 and is off to its worst year-to-date start since 1987. There were beneficiaries of the Dollar’s daily weakness as gold closed at its highest level since August 2016 and U.S. crude prices rallied more than 2% to its best level since December 2014.