The dollar was on track for its second straight weekly gain on Friday, its first back-to-back rise in more than three months, as surging Treasury yiel
The dollar was on track for its second straight weekly gain on Friday, its first back-to-back rise in more than three months, as surging Treasury yields and mounting bets on further Federal Reserve rate hikes kept the greenback near multi-month peaks.
The dollar index, which tracks the currency against a basket of major peers, had climbed more than 1% for the week to a two-month high, though the rally was showing signs of losing steam, last easing slightly to 101.2.
Behind the move is an aggressive repricing of the US rate trajectory after the Fed tightened policy last week, reinforced by robust economic data and renewed energy-supply concerns.
A sharp selloff in bonds pushed long-dated Treasury yields to their highest levels in more than two decades; the 30-year yield touched 5.501%, a level unseen since 2004, while the 10-year surged past 5.2%, its highest since 2007, lending further support to the dollar.
The strength has been broad-based: the euro slid to a two-month low near $1.1370 and is headed for a third straight weekly decline, its worst run since late 2025, while sterling hovered near a three-month low around $1.3220, on pace for its worst week in four months.
Not everyone expects the rally to run much further. “Whilst the dollar should get a bid from higher yields, there are still ongoing lingering concerns around the US fiscal position, the unpredictability of US policymaking,” said Khoon Goh, head of Asia research at ANZ, noting the dollar has struggled to sustain momentum even as yields keep climbing.
Elsewhere, the Australian dollar edged up to $0.7015 ahead of an expected Reserve Bank of Australia rate hike next week, while the offshore yuan held steady near 6.715 as a Trump-Xi summit in Washington yielded no breakthroughs on trade, AI, Taiwan or Iran.
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