Dollar strongest since 2003; bond selloff resumes
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A news photographer take photos of monitors displaying the Japanese yen's exchange rate against British pound (top) and Japan's Nikkei share average at a foreign exchange trading company in Tokyo, Japan, June 27, 2016. REUTERS/Toru Hanai
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By Rodrigo Campos
NEW YORK (Reuters) - The U.S. dollar climbed on Friday to its highest level since 2003 on continued bets on faster inflation and higher interest rates, while Treasuries resumed a selloff that left benchmark yields on track to post their steepest two-week increase in 13 years.
A growing perception that the economic policies of U.S. President-elect Donald Trump will lift consumer prices pushed the dollar higher, weighing on crude and other commodities.
On Wall Street, the tech- and biotech-heavy Nasdaq Composite hit a record intraday high before slipping lower. The Dow industrials and S&P 500 were also near record highs despite the day's decline.
"I think given the major indexes are at or near all-time highs, we're probably due for a little bit of a digestion period," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
"Equities are generally expected to move sideways until we get a little more of visibility into what some of the policies are going to be with the new administration."
The Dow Jones industrial average <.DJI> fell 39.48 points, or 0.21 percent, to 18,864.34, the S&P 500 <.SPX> lost 5.55 points, or 0.25 percent, to 2,181.57 while the Nasdaq Composite <.IXIC> dropped 14.15 points, or 0.27 percent, to 5,320.83.
The pan-European FTSEurofirst 300 index <.FTEU3> fell 0.54 percent, while MSCI's gauge of stocks across the globe <.MIWD00000PUS> fell 0.49 percent.
Emerging market stocks fell 0.2 percent and remained near a four-month low hit Monday.
The U.S. dollar's rise against the yen
BOND SELLOFF RESUMES, GREENBACK FLIES
Last week's unexpected U.S. election victory from political neophyte Donald Trump has led to a repricing of assets, most notably in currency and bond markets.
Federal Reserve policymaker James Bullard said on Friday he is leaning toward supporting a rate rise in December, adding that a plethora of potential changes under Trump could affect future policy.
The dollar index <.DXY> hit a high of 101.48, its highest level since April 2003. It has risen over 4 percent in the last two weeks, its biggest fortnightly rise since March 2015.
The 10-year U.S. Treasury yield
(Reporting by Rodrigo Campos; additional treporting by Tanya Agrawal in Bangalore and Richard Leong and Dion Rabouin in New York; Editing by Nick Zieminski)
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