The dollar index retreated from the five-month peak, the Fed’s protocol is in focus

SINGAPORE, May 22 (Reuters) – The dollar is traded below the five-month high on Tuesday morning, taking a breather after the rally, supported by rising yields of the US government bonds and easing tensions in US-China trade relations.

The dollar index, which tracks the dynamics of the US currency against a basket of six major competitors, was traded at 93.593 by 08:40, having retreated from the maximum of five months of 94,058 reached on Monday.

The retracement of the yield of the US Treasury’s ten-year bonds from seven-year highs set last week probably caused traders to record profits from the strengthening of the dollar, analysts said.

During the last month, the dollar was supported by the good economic statistics of the US, as well as by the growth in the yield of the US government bonds.

The prospect of resolving a trade dispute between the US and China also increased the attractiveness of the US currency.

The yield of ten-year treasury bonds has moved away from Friday’s maximum in almost seven years by 3,128 percent, having fallen to the level of 3,0523 percent.

In relation to the yen, the dollar weakened by 0.1 percent to 110.90 yen after reaching a four-month peak of 111.395 yen on Monday.

The euro fell by 0.1 percent to $ 1.1779, but is higher than the low of $ 1.1717, the lowest since mid-November.

The pressure on the single currency is provided by the political uncertainty in Italy.

Investors are waiting for the release of the minutes of the last meeting of the US Federal Reserve, which will be made public on Wednesday and may shed light on the pace of policy tightening by the regulator.