Euro Hits Two-Month Low as US Yields Soar Above 5%

The euro has fallen to its lowest level in two months as US Treasury yields breach 5% and oil prices rebound, lifting the dollar. The currency was trading around $1.1380 on Thursday after a nearly 2% decline in less than two weeks.

Preliminary data showed business activity expanding at its fastest pace in over five years, with jobs and wages rising quickly as input prices jumped alongside higher energy costs. This has put pressure on the euro, which is sensitive to changes in the US economy and interest rates.

The Federal Reserve's commitment to returning inflation to 2% has also contributed to the dollar's strength. A poorly received five-year US Treasury auction pushed yields higher, with the benchmark 10-year rate moving above 5% for the first time in 19 years.