1 hr ago
Dollar Gains Third Week as Treasury Yields Hit 2002 High
The United States dollar rose for the third week in a row.
Government bond prices fell sharply, which pushed their interest rates higher.
The interest rate on a 10-year United States Treasury bond briefly reached its highest level since 2002.
Investors are worried that inflation may stay high because oil prices are rising.
They are also concerned about large government borrowing and financial problems in parts of Europe.
The euro weakened as worries about France increased.
The Federal Reserve has said it wants more economic information before deciding whether to raise interest rates again.
Investors were therefore watching the United States jobs report closely.
The dollar index was set for a 1% weekly gain, extending its winning streak to three weeks.
United States 10-year Treasury yields reached 5.344% on Thursday, the highest level since 2002, before easing to 5.249%.
Investors are weighing persistent inflation, heavy government borrowing, large bond supplies and rising oil prices.
The euro fell toward a May 2025 low amid concerns about France’s finances and broader political risks in Europe.
Markets focused on the United States jobs report for clues about the Federal Reserve’s next interest-rate decision.
- Who
- The United States dollar, global investors, the Federal Reserve and major currencies including the euro and yen.
- What
- The dollar was heading for a third consecutive weekly gain as global bond yields rose to multi-decade highs.
- Where
- In global financial markets, with notable effects in the United States, Europe and Japan.
- When
- Friday, following a major bond-market sell-off on Thursday; the dollar’s weekly gain was expected to be about 1%.
- Why
- Persistent inflation concerns, higher oil prices, heavy government borrowing, large bond supplies and political and fiscal risks in Europe supported demand for the dollar.
Key facts
- Dollar index
- 102.08, with a projected 1% gain for the week
- 10-year Treasury yield
- 5.344% on Thursday, its highest level since 2002
- Friday Treasury yield
- 5.249% in early trading
- Euro
- $1.1237, near its lowest level since May 2025
- Yen
- 158 per United States dollar
- Brent crude
- Above $100 per barrel
- United States unemployment forecast
- 4.1% for September, unchanged for a third straight month
Quotes
Prashant Newnaha
Senior rates strategist at TD Securities
“The fact that long-end yields are pushing higher even as expectations for an immediate Fed hike have eased suggests this is increasingly about the term premium and fiscal risk, not just the next Fed decision.”
CNBC TV 18
“This is a flight-to-safety move spurred on by developments in Europe. In this scenario expect the dollar index and the yen to strengthen at the same time.”
CNBC TV 18
Chris Weston
Head of research at Pepperstone
“With the Fed now myopically focused on inflation and price pressures, a hot wages print could prove particularly influential for US rates, Treasuries and the USD.”
CNBC TV 18
Sources
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