Dollar Surges to Two-Month High Amid Fed Tightening Bets

The US dollar held near a two-month high on Tuesday, maintaining its dominance over major rival currencies as surging US Treasury yields and expectations for further Federal Reserve policy tightening continued to dictate the global exchange-rate tape.

The Dollar Index, which tracks the greenback against a basket of six major currencies, rose 0.1% to 101.30 after touching an intraday peak of 101.33. The index remains on track to close out September with a 1.9% advance, anchored by a relentless sell-off in US government debt that has lifted benchmark yields to multi-decade peaks.

US Treasury yields rose as high as 5.23%, while the Australian dollar traded under heavy selling pressure, sliding 0.4% to $0.6989 and breaching the critical $0.7000 psychological handle to touch its lowest level in nearly two months.