US Dollar Index Surges to New Highs Amid Rising Treasury Yields
The US Dollar Index (DXY) has reached new highs in 2026, surpassing 102.20 for the first time since April 10, 2025.
This marks a significant shift from the previous 18 months, during which most major currency pairs were stuck within tight ranges and short-lived swings.
The rise of the US Dollar can be attributed to the surge in US Treasury yields, with the 10-year yield reaching 5.33% on Thursday, its highest level since 2007.
Analysts at ING suggest that the market is pricing for a Fed hike in December, while strategists at BBH point out that USD gains are tracking widening US-G6 interest rate differentials and argue that strong foreign appetite for US securities can keep USD risks skewed to the upside.
The DXY has formed a bullish crossover between its 20-day and 100-day moving averages, with momentum remaining firm despite some post-NFP dip. A close above 101.70 would provide another strong bullish signal to break out of the last 18 months' range.