NEW YORK — A weak dollar in foreign exchange and higher commodity prices helped depress the credit markets Friday in very sluggish post-holiday trading.
The Treasury's key 30-year issue declined about 3/4 point, or $7.50 for every $1,000 in face amount. Its yield, which moves inversely to its price, rose to 9.13% from 9.06% late Wednesday.
The financial markets were closed Thursday in observance of the Thanksgiving holiday. Most traders also left early Friday or took the day off.
"Price movements were probably exaggerated because trading volume was slight," said Carol A. Stone, a senior economist for Nomura Securities Inc.
She attributed Friday's price slump to higher commodity prices and a weak dollar. Traders worry that both could ignite higher inflation, which erodes the prices of bonds and notes.
In the secondary market for Treasury bonds, prices of short-term government issues fell about point, intermediate maturities declined between 5/16 point and 5/8 point and 20-year issues were off about a point, according to figures provided by Telerate Inc.
The movement of a point equals a change of $10 in the price of a bond with a $1,000 face value.
The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 0.61 to 109.30. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, fell 5.27 to 1,144.95.
In corporate trading, industrials were off 1/2 point and utilities fell 3/8 point in light activity.
Yields on three-month Treasury bills were down 8 basis points to 5.60%. A basis point is one-hundredth of a percentage point. Six-month bill yields rose 5 basis points to 6.19% and one-year bill yields rose 7 basis points at 6.65%.
The federal funds rate, the interest on overnight loans between banks, traded at 6.75%, up from 6.625% late Wednesday.