Dollar Rises After Report Shows Stronger Demand for U.S. Assets
Aug. 15 (Bloomberg) -- The dollar rose against the euro after a Treasury Department report showed foreign investors bought U.S. assets in June at the fastest pace in four months.
nternational investors bought a net $71.2 billion Treasury notes, corporate bonds and other securities, compared with $55.8 billion in the previous month. The report reinforced speculation rising interest rates in the U.S. compared with Europe and Japan are increasing demand for dollar-denominated assets.
Demand from international investors, who hold almost half of all U.S. government debt, climbed at a sale of 10-year U.S. Treasury notes last week. The Aug. 11 auction showed foreign central banks and investors that bid through so-called primary dealers bought 46.9 percent of the $13 billion of 10-year notes sold, the most since June 2003.
``The premium that the U.S. now has above Europe is very attractive,'' said Marcus Ostwald, a fixed-income strategist at broker Monument Securities in London. The dollar's drop toward $1.25 per euro last week wasn't justified by the higher yields offered by Treasuries compared with European bonds, he said.