Dollar Soars as Global Bond Selloff Intensifies
The US dollar rose on Tuesday as a global bond selloff intensified and inflation concerns resurfaced following renewed attacks in the Gulf region. The dollar index, which measures the US currency against six major peers, increased by 0.2% to 99.623.
Market expectations of a Federal Reserve interest rate hike also contributed to the dollar's gain, with traders increasing their bets on a September rate increase following hawkish remarks from Fed Chair Kevin Warsh last week.
The yen weakened further, trading at 159.99 per dollar after weakening beyond the 160 level for a third consecutive session. Japanese authorities are under pressure to support the currency, and US Treasury Secretary Scott Bessent said he believes the Japanese government and the Bank of Japan will take measures that lead to an appreciation of the yen.
US President Donald Trump's threat of further strikes against Iran pushed Brent crude futures above $91 a barrel, fueling inflation concerns and triggering a selloff in bond markets. The 10-year US Treasury yield climbed to its highest level since January 2025, while the yield on 10-year Japanese government bonds touched 3% for the first time in 30 years.