Dollar Surges to 17-Month High Amid Global Bond Rout and European Fiscal Concerns

The US dollar has surged to a 17-month high as global bond markets experience a rout due to inflationary fears and higher oil prices.

The dollar index, which measures the currency against six rivals, rose to 102.08 on October 2, setting a 1% gain for the week, its third consecutive weekly increase since May 2025.

This strength is largely attributed to concerns over Europe's fiscal health and the ongoing conflict in the Middle East, which has dented sentiment around the euro.

Chris Weston, head of research at Pepperstone, noted that 'the market is not pricing for a hawkish Fed' and that this is instead a 'flight-to-safety move spurred on by developments in Europe.'