Forex
Dollar Soars, US Treasury Yields Jump Ahead of Fed Rate Decision
US Treasury yields rose to their highest level since July 2007 on Tuesday, reaching 5.041% intraday and settling at 5.008%. This surge in borrowing costs came as traders aggressively repositioned ahead of the Federal Reserve's rate decision.
The dollar index climbed 0.3% to 99.66, its highest level since September 1, driven by a sharp increase in US Treasury yields and extended gains in oil prices. The dollar gained 0.5% against the Japanese yen, which weakened to as low as 155.12 per dollar.
According to the CME FedWatch Tool, markets now assign a 94.5% probability that the Federal Open Market Committee will announce a 25-basis-point rate hike on Wednesday, up sharply from 59% just one week ago.