Supported US Treasury Bonds, USD Stronger, GBP Stable

The US dollar (USD) received support from higher US Treasury yields in early Asian trade on Tuesday, while British sterling (GBP) held back a recent decline, following concerns about Theresa May's ability to stay as British Prime Minister . The USD index, which tracks the US currency against a basket of six major rivals, was stable today at 94.499. Against the Japanese currency (JPY) currency, the USD inched 0.1 percent higher to 113.70 yen, but remained below the eight month low at JPY 114,735 last week.

"USD has the support of the US bond yields, but I'm really surprised that the USD is not going higher, so maybe the correlation between the USD and USD bond yields is down," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo. with the Fed expected to raise interest rates in December, the USD could rise higher in the coming weeks, "he said.

The yield on the two-year US Treasury note hit a nine-year peak on Monday, as the yield curve continued to flatten and investors booked a 25 basis point rise by the Federal Reserve next month. Imabal 10-year Treasury yield rose to 2.405 percent from the US close on Monday by 2,400 percent. At 2,304 percent on Nov. 8.

Euro (EUR) is stable at USD 1.1670, staying above the lowest level of 3.5 months at USD 1.1553. GBP edged up 0.1 percent to USD 1.3122 after coming under pressure from political turmoil ahead of this week's debate by UK lawmakers on a government plan to leave the European Union.

The debate over the Brexit bill begins on Tuesday and Wednesday, and goes against an unstable political background. As many as 40 May lawmakers will support a no-confidence motion against him, according to the Sunday Times newspaper. Also this week's focus will be attributed to the heads of the European Central Bank (ECB) Mario Draghi, Federal Reserve Chairman Janet Yellen, Bank of Japan Governor Haruhiko Kuroda and chief Bank of England (BOE) Mark Carney will form the central bank's communications panel at a conference hosted by the ECB in Frankfurt on Thursday.