Euro Plunges to 17-Month Low on Soaring US Treasury Yields

The euro has reached its weakest level in 17 months as surging U.S. Treasury yields strengthen the dollar and widen the gap between U.S. and European financial conditions.

The EUR/USD pair slipped below $1.123, while the dollar index gained about 0.6%. The move came as the U.S. 10-year Treasury yield briefly reached 5.34%, its highest level since 2002.

The main driver is the yield advantage offered by U.S. government debt. Higher Treasury yields increase the return investors can earn on dollar-denominated assets, attracting global capital toward the U.S. and increasing demand for the dollar.