Dollar Surges Against Euro Amid Rising Yields and Hawkish Fed Expectations

The US dollar is on track for its fourth consecutive weekly gain against the euro, supported by high US Treasury yields and expectations of continued hawkish monetary policy from the Federal Reserve.

Elevated yields have led to a selloff in European government bond markets, with French 10-year bond yields reaching their highest level since 2002 on Thursday. The premium over safe-haven German yields rose above 150 basis points for the first time since late 2011.

The euro is headed for its fourth straight week of losses against the dollar, its longest such stretch since mid-May 2025. Benchmark 10-year Treasury yields slipped after a report showed US job growth in September fell short of expectations, but remained near multi-decade highs at 5.191%.