Dollar Soars as Global Bond Sell-Off Spurs Inflation Fears

Rising global borrowing costs and concerns about inflation are driving currency markets in favor of the U.S. dollar, pushing it to new heights.

The dollar's strength is attributed to a sharp global bond sell-off that pushed benchmark U.S. 10-year Treasury yields to 5.344%, their highest since 2002, before easing to 5.249% in early Friday trading.

The euro has fallen to $1.1237, near its weakest level since May 2025, as concerns over France's fiscal outlook and rising French yields trigger a flight-to-safety into the dollar.

Charu Chanana, chief investment strategist at Saxo, says markets are facing a difficult mix of sticky inflation, heavy government borrowing, and large bond supply.