Dollar rebounds from 3-week low after US bond yield jumps

The US dollar rose against a basket of currencies on Wednesday, and rebounded from the 3-week low hit yesterday, to head for the first daily gain in 6 days, thanks to strong demand after the 10-year US Treasury bond rose.

The dollar index rose 0.1% to 93.88 points, after opening at 93.80 points, and hit a high at 93.67 points.

The index lost less than 0.2% yesterday, the fifth straight daily loss, and hit a 3-week low at 93.50 points.

The US dollar fell recently due to correction and profit-taking from a 13-month peak, and after the release of weak data on industrial production in the US.

The 10-year US Treasury yield rose 2.1% today, and hit a 5-month high at 1.673%, which lifts demand for the greenback.

This came due to growing odds that the Federal Reserve will start reducing its bond-buying program during its next meeting, which is an essential step before an interest rate hike.