Dollar Strengthens on Surging Yields and Hawkish Fed Bets
The US dollar is poised for its first consecutive weekly gains in over three months as Treasury yields surge and investors bet on further Federal Reserve rate hikes.
This has pushed the greenback near multi-month peaks, with the euro reaching a two-month low of $1.1370 and sterling languishing near a three-month low of $1.3220.
Philadelphia Federal Reserve President Anna Paulson stated that interest rates may need to be raised further to bring inflation back in line with targets.
The rate hike, which occurred just last week, has already been priced into the market by investors who are now anticipating another increase.
The USD/JPY pair is also under pressure due to these developments, and its outlook for 2026 will largely depend on the direction of Federal Reserve policy.