Dollar Strengthens Amid Hawkish Fed Comments and Rising Yields

The US Dollar Index (DXY) has edged lower to around 101.15 in Friday's early European session, but remains on track for its second week of gains above 101.00.

The DXY has been bolstered by higher US Treasury bond yields and hawkish Federal Reserve comments, which have strengthened expectations for further tightening.

US Treasury yields have surged to their highest levels since June 2004 and 2007, with the 30-year yield reaching 5.502% and the 10-year yield climbing to 5.225%.

Markets are now pricing in nearly a 67.5% chance of a Fed rate hike in October, up from 55.4% a week earlier and 11% a month ago.