U.S. Dollar Advances Amid Rising Treasury Yields

The U.S. dollar climbed against its major counterparts in the European session on Friday, along with treasury yields, as Federal Reserve Chair Jerome Powell supported the likelihood of 50 basis point rate hikes at the next two meetings.

In an interview with Marketplace on Thursday, Powell reiterated that the central bank is considering to raise interest rates by a half point at the coming meetings in June and July.

"If the economy performs about as expected, it would be appropriate for there to be additional 50-basis point increases at the next two meetings," Powell said.

Powell added that the Fed's main priority is to get inflation back down to 2 percent and pledged to do more if factors come in worse than expected.

U.S. treasury yields rose, with the benchmark 10-year yield touching 2.92 percent.

Data from the Labor Department showed that U.S. import prices were unexpectedly unchanged in the month of April after a sharp increase in the previous month.

The Labor Department said import prices came in flat in April after surging by an upwardly revised 2.9 percent in March.

The greenback firmed to 1.2155 against the pound, its highest level since May 2020. It touched 1.0349 against the euro for the first time since January 2017. The greenback may challenge resistance around 1.20 against the pound and 1.01 against the euro.

The greenback rose to 1.0047 against the franc and 129.45 against the yen, from its previous lows of 0.9992 and 128.25, respectively. The next likely resistance for the greenback is seen around 1.02 against the franc and 132.5 against the yen.

In contrast, the greenback slipped against the aussie and the kiwi and was trading at 0.6923 and 0.6266, respectively. On the downside, support is seen near 0.72 against the aussie and 0.64 against the kiwi.

The greenback was down against the loonie, at a 2-day low of 1.2924. Next key support for the greenback is likely seen around the 1.25 level.