Dollar bounces as expectations of Fed rate hike climb

Against the yen , the dollar rose to a one-month peak of 134.22 on Monday, with the Japanese currency coming under pressure as the Bank of JapanMeanwhile, the U.S. dollar index steadied at 101.65, standing some distance away from Friday's one-year low of 100.78.

Friday marked the fifth straight weekly loss for the index, as recent signs that inflation in the United States is cooling have raised expectations that the Federal Reserve would not have to hike rates as much as previously feared."The U.S. bank earnings came out much better than expectations, which suggests that the U.S. economy is not so bad ... So I think that will increase for the Fed to continue raising interest rates," said Tina Teng, market analyst at CMC Markets.

Money markets are now pricing in a roughly 81% chance that the Federal Reserve will raise interest rates by 25 basis points next month, up from about a 69% chance last week. Short-term inflation expectations have also increased, with the University of Michigan's preliminary AprilYields on U.S. Treasuries remained elevated on Monday, holding on to most of Friday's jump.

The two-year U.S. Treasury yield , which typically moves in step with interest rate expectations, stood at 4.1161%, after hitting a roughly two-week top of 4.137% on Friday.Some hawkish Fed speak also aided the higher interest rate expectations, with Fed Governor Christopher

2008 around the corner. This artificial supporting crutches won't be able to hold the falling. More banks will sink. Many home buyers will surrender. Business loans will fail.

Yellen's statement appears to be right! Despite the decrease in deposits, profits rose more than expected, which increases the chances that the Fed will raise interest rates next May.

Pretty normal. The biggest question is, how they can preserve USD domination.

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