Dollar Surges in September, Leaving Euro Lagging
The greenback’s rally reflects bets on further Federal Reserve tightening as the 10-year Treasury yield hit its highest level since 2007, traders said.
- The U.S. dollar strengthened in September, advancing nearly 2% against the euro as The Bloomberg Dollar Spot Index rose about 2% this month, nearing multi-month highs on Wednesday.
- Rising Treasury yields, with the two-year benchmark closing in on 5%, bolstered the greenback as markets increased expectations for a Federal Reserve rate hike in October to more than 70%.
- The euro declined 2.6% this month, pressured by persistent energy concerns and political instability in France, where the premium investors demand over German debt exceeded 110 basis points.
- Bank of Nassau 1982 chief economist Win Thin said, "This is broad-based dollar strength on rising yields," while Morgan Stanley analysts expect the greenback to maintain dominance through year-end.
- Investors are tracking the Personal Consumption Expenditures index due Wednesday and nonfarm payrolls on Friday, which serve as critical hurdles for confirming the dollar's momentum in coming weeks.
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Dollar at 17-month high as global bond rout hits euro
SINGAPORE: The US dollar headed for its third straight week of gains on Friday, perched at a 17-month high as a bond market rout pushed borrowing costs across the globe to multi-decade peaks in the face of inflationary fears over higher oil prices. Investors were reeling from a steep global bond sell-off on Thursday that sent yields on benchmark US 10-year Treasuries to 5.344%, their highest since 2002, ahead of a US jobs report that could inf…
The exchange rate seeks to record its fourth consecutive day upwards.
The burden of rising bond yields covers other capital markets. 159 liters of Brent cost more than 100 dollars again. And the Dax has slipped below 25,000 points for the first time since July.
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