Dollar Dominance Continues Amid Fed Rate Hike Expectations
The US dollar continued to dominate global currencies on Tuesday, reaching a two-month high as investors remained confident in the Federal Reserve's tightening monetary policy. The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, rose 0.1% to 101.30 after touching an intraday peak of 101.33.
The surge in US Treasury yields has further solidified the dollar's strength, with benchmark yields reaching multi-decade highs. The 10-year yield held near its highest level since July 2007 at 5.23%, while the 30-year yield hovered near 5.55% - its highest since 2004.
The Australian dollar, however, suffered a significant decline despite the Reserve Bank of Australia's (RBA) widely expected rate hike to 4.60%. The Aussie traded under heavy selling pressure, sliding 0.4% to $0.6989 and breaching the critical $0.7000 psychological handle.