Dollar set for weekly gains as yields surge, Fed bets build
The US dollar is poised for its first back-to-back weekly gains in over three months, driven by surging Treasury yields and increased expectations for further Federal Reserve rate hikes. This strength has pushed the euro and sterling to multi-month lows, despite some lingering concerns about US fiscal policy.
Why it matters
It indicates significant shifts in global currency markets and monetary policy expectations, impacting international trade, investment, and the cost of borrowing.
The dollar was set for its first back-to-back weekly gains in more than three months on Friday, as surging Treasury yields and mounting bets on further Federal Reserve rate hikes kept the greenback near multi-month peaks.
Dollar strength pushed the euro to a two-month low of $1.1370 and put it on track for a third weekly decline, its worst losing streak since the end of 2025. Sterling languished near a three-month low of $1.3220 and was on track for its worst weekly performance in four months.
Markets have aggressively repriced the interest rate trajectory after the Fed tightened policy last week, while robust economic data and fresh energy supply concerns have further strengthened that conviction. A bond selloff, which sent long-dated US Treasury yields to their highest in more than 20 years, also gave the greenback a leg up.
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