Dollar Surges to 17-Month High Amid Inflation Fears and European Fiscal Worries
The US dollar surged to a 17-month high on Friday as investors sought safe-haven assets amid concerns over inflation and European fiscal health. The euro fell to its lowest level since May 2025, trading at $1.1237.
The global bond market saw a steep selloff on Thursday, with yields on US 10-year Treasuries reaching 5.344%, their highest since 2002. However, the market steadied as traders braced for US jobs data that could influence near-term policy outlook.
Moh Siong Sim, currency strategist at OCBC in Singapore, attributed the initial move higher in yields to rising energy prices, but noted that European fiscal risk concerns overshadowed this factor. The underperformance of French and Italian government bonds relative to US Treasuries and German Bunds points to a flight into liquid and defensive sovereign markets.