US dollar climbs higher as the bond market eyes two-year auction

<p>EUR/USD has given back most of yesterday's gains and is trading at a session low, down 57 pips to 1.0611. The dollar is broadly stronger at the moment as Treasury yields tick higher.</p><p>The short-end is leading the move with US 2-year yields up 2.4 bps to 5.086% as a concession is built in ahead of today's $51 billion sale. Further out the horizon, the market is pricing in 71 bps of cuts by the end of next year and how that develops will feed directly into 2s. The worrisome thing though is supply with 5s and 7s also to come this week and the refunding announcement on the morning of next Wednesday's FOMC decision.</p>

This article was written by Adam Button at www.forexlive.com.