The US dollar maintained its strength near 19-month highs on Friday, poised for its largest weekly gain in two months. This surge was driven by rising US Treasury yields, fueled by President Donald Trump's remarks about Iran and concerns over Middle Eastern oil supply, which lifted crude prices and inflation expectations. Federal Reserve officials' hawkish comments and stronger-than-expected US inflation data this week have also heightened expectations of a larger-than-usual rate hike next month. Two-year Treasury yields climbed around 34 basis points this week to 4.86%, marking the biggest weekly jump since September 2024.
The euro remained unchanged at $1.1053, down 0.8% for the week, its largest weekly loss since late September. Analysts predict the euro will stay within the $1.10-$1.12 range in the coming months, though a harsh European winter could push it below $1.10. Meanwhile, the yen hovered around 159.99 per dollar, near its weakest since early September, raising concerns about potential intervention. Japanese Finance Minister Satsuki Katayama warned of appropriate responses to excessive currency volatility.
The Australian dollar, down 3.4% this month to $0.6789, is the worst-performing G10 currency against the greenback. The dollar index stood at 103.21, near its highest since April 2025, set to gain 0.9% for the week, the most since September. In cryptocurrencies, Bitcoin fell 3% to $69,361, while Ether dropped 2.7% to $1,962.02.