Dollar Reaches New Heights as Global Bond Selloff Continues

The dollar has reached its highest level against the euro in nearly two years, driven by a global bond selloff and rising US Treasury yields. The euro fell below $1.1215 for the first time since May 2023 against the dollar, which has been gaining ground over the past couple of months.

Brian Daingerfield, head of G10 FX strategy at NatWest Markets, attributed the higher yields to a combination of factors, including concern about fiscal policy and weakness in French bond markets. He also noted that market expectations for continued tightening from central banks, including the Federal Reserve, are likely to continue.

The yield on benchmark US 10-year notes hit its highest level since 2002 at 5.237 per cent, while the euro sank against the yen and Swiss franc. French debt yields surged to a 14-year high, exacerbating worries about France's shaky finances and spreading concern across European markets.