Trick or trend: Will the Bank of Japan and the European Central Bank raise rates enough this week to slow the dollar? Nah!

Trick or trend: Will the Bank of Japan and the European Central Bank raise rates enough this week to slow the dollar? Nah!

The dollar is likely to get another boost from the Bank of Japan and the European Central Bank this week. On Thursday, the European Central Bank is likely to report its first interest-rate increase in more than a decade. But the increase is likely to be just 25 basis points. That will be a stark reminder of how far behind the Federal Reserve, which raised interest rates 75 basis points in June and is expected to increase rates by another 75 basis points at its July 27 meeting. On Thursday the Bank of Japan is expected to keep its benchmark interest rates at its current low, low, low level.

Treasury yields rise and prices fall on rise in European bond yields

Treasury yields rise and prices fall on rise in European bond yields

The yield on the 10-year Treasury jumped 7 basis points to 1.84% today, February 3. The move was in concert to higher yields on United Kingdom and German bonds after the Bank if England and the European Central Bank signaled worry about rising inflation at the central banks meetings. The key move was the rise in the yield on the German 10-year Bund. The yield on that maturity had been below 0% until hi week when it jumped to a positive 0.15%.