U.S. Dollar Advances On Rising U.S. Bond Yields

The U.S. dollar climbed against its major counterparts in early European deals on Thursday, as U.S. treasury yields rose, with the 10 year yield above 3.10 percent for the first time since July 2011.

Solid economic data on U.S. retail sales, factory production and housing starts released this week pointed to a strengthening economy.

The benchmark yield on 10-year note rose 3.11 percent, while that of 2-year equivalent was up by 2.59 percent. Yields move inversely to bond prices.

Investors await U.S. reports on weekly jobless claims, leading economic indicators and Philadelphia-area manufacturing activity due later in the day for more direction.

Also in focus is the start of the second round of trade talks between the U.S. and China today in a bid to avert a potential trade war.

The greenback traded mixed against its major counterparts in the Asian session. While it held steady against the franc and the euro, it rose against the yen. Against the pound, it declined.

The greenback recovered to 1.3493 against the pound, from a 2-day low of 1.3569 hit at 10:00 pm ET. The greenback is seen challenging resistance around the 1.32 area.

Having fallen to 0.9987 against the franc at 10:30 pm ET, the greenback reversed direction and advanced to 1.0020. The greenback is likely to find resistance around the 1.03 level.

The greenback reversed from an early low of 1.1837 against the euro, rising to 1.1793. The next possible resistance for the greenback is seen around the 1.16 area.

The greenback spiked up to 110.74 against the yen, its highest since January 23. The greenback is poised to challenge resistance around the 112.00 mark.

Data from the Cabinet Office showed that Japan core machine orders fell 3.9 percent on month in March.

That missed expectations for a decline of 3.0 percent following the 2.1 percent increase in February. The greenback was trading at 0.7532 against the aussie and 0.6894 against the kiwi, up from early 3-day lows of 0.7548 and 0.6938, respectively. If the greenback continues its rise, 0.73 and 0.66 are possibly seen as its next resistance levels against the aussie and the kiwi, respectively.

On the flip side, the greenback fell back to 1.2753 against the loonie, just few pips short of its early 3-day low of 1.2750. On the downside, 1.26 is possibly seen as the next support level for the greenback.

Looking ahead, U.S. weekly jobless claims for the week ended May 12 and leading index for April are scheduled for release in the New York session.

The Bank of England Chief Economist Andy Haldane will give speech at the Economic Statistics Centre of Excellence Conference on Economic Measurement in London at 12:00 pm ET.