NEW YORK - The US dollar gained in late trading on Tuesday, as the market remained nervous for the hawkish interest rate projections from the Federal Reserve, reported Xinhua.
The benchmark US Treasury 10-year yield rose a couple of basis points to near 4.57 per cent early Tuesday, the highest since 2007, before it pulled back.
Higher Treasury yields lifted the US dollar, with the dollar index, which measures the greenback against six major peers, was up 0.22 per cent at 106.2270 in late trading, its highest in about 10 months.
President Joe Biden on Tuesday asked Congress in a social media post to fund the government as warnings grew that a looming shutdown could harm the US credit rating and dollar. Moody's and Wells Fargo warned this week that a shutdown would negatively impact the US economy.
Meanwhile, The Conference Board's consumer confidence index fell for a second consecutive month, dropping to 103 in September from an upwardly revised reading of 108.7 a month before.
The index is at its second-lowest level this year, landing just above May's 102.5 reading, according to data. Consumer spending serves as a critical driver for US economic growth.
Minneapolis Fed President Neel Kashkari said on Tuesday that he saw a soft landing for the US economy as more likely, but also a 40 per cent chance that the Fed should raise rates significantly to combat inflation.
In an interview, JP Morgan Chairman Jamie Dimon said Tuesday that the worst case would be 7 per cent interest rates with stagflation, "If they are going to have lower volumes and higher rates, there will be stress in the system. We urge our clients to be prepared for that kind of stress. I am not sure if the world is prepared for 7 per cent."
In late New York trading, the euro decreased to 1.0566 US dollars from 1.0587 dollars in the previous session, and the British pound was down to 1.2157 US dollars from 1.2208 dollars.
The US dollar bought 149.0710 Japanese yen, higher than 148.8090 Japanese yen of the previous session. The US dollar rose to 0.9152 Swiss francs from 0.9123 Swiss francs, and it was up to 1.3521 Canadian dollars from 1.3471 Canadian dollars. The US dollar fell to 11.0285 Swedish krona from 11.0561 Swedish krona. - BERNAMA