Dollar Surges on Rate Hike Expectations, Weakening Yen Amid Rising Treasury Yields

The US Dollar has reached a six-week high and is trading near 17-month highs due to strengthening US business activity and growing support from FOMC members for a rate rise. The strengthening of the PMI suggests that US GDP growth will be faster than experts had previously forecast.

Rising Treasury yields are pushing up the USDJPY, which has reached 158.6. Speculators are taking heart from the fact that the Treasury's buyback of government bonds is not halting the rise in yields.

The interest rate differential between central banks remains wide, and interventions require a 'shock and awe' scale of operation to break the back of the USDJPY bulls.