Benchmark 2-year German bunds yield 86 basis points more than Treasuries with comparable maturities. Still, the yield premium has shrunk from 112 basis points at the end of last year. A basis point it 0.01 percentage point.
Snow told reporters today that the US would increase pressure on G7 members to boost growth amid evidence that world growth has stalled.
"The real concern on the part of the US administration is that much of the rest of the world isn't doing their share to try to stimulate growth," Robert Sinche, head of currency strategy at Citigroup Inc, said. Citigroup has the second-largest share of trading in the US$1.2 trillion-a-day currency market, behind UBS AG, according to this year's Euromoney magazine poll.
The European central bank cut its 2.5 percent interest-rate target next month to help revive growth in the euro region. The yield on the three-month Euribor contract for June closed 2 basis points lower at 2.235 percent, down from 2.36 percent two weeks ago and a sign traders are betting on a rate cut.
The yen has climbed about 4 percent against the dollar since mid-March. Further gains may be limited by speculation the Bank of Japan will sell more of its currency after it sold ¥2.39 trillion (US$20.5 billion) in the first quarter.
"Expectations are that the BOJ will come into the market as the dollar continues to decline against the yen," said Robert Lynch, a currency strategist at BNP Paribas, the 13th-largest currency trader.
The central bank, at the behest of the Ministry of Finance, acted when the currency was trading between 116.35 and 121.76 against the dollar. The biggest one-day sale of yen in the period was on Feb. 27 with ¥361.5 billion.
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