Dollar hits 10-month high as US yields spike, yen slides
By Harry Robertson and Tom Westbrook
LONDON/SINGAPORE (Reuters) — The dollar rose to a new 10-month peak on Tuesday as U.S. bond yields surged to their highest level since October 2007, while the Japanese yen resumed its slide, putting traders on alert for signs of government intervention.
Federal Reserve policymaker Neel Kashkari said on Monday that, given the strength of the U.S economy, interest rates should probably rise again and be held «higher for longer» until inflation falls back down to 2%.
His comments helped push up the yield on the 10-year U.S. Treasury — the benchmark U.S. yield that sets the tone for borrowing costs around the world — to 4.566% on Tuesday. Bond yields move inversely to prices.
Higher U.S. yields boosted the allure of the greenback, pushing the dollar index to 106.2, the highest since late November 2022. The index, which tracks the currency against six major peers, was last up 0.11% at 106.07.
The euro was last roughly flat against the dollar at $1.0588, after hitting its lowest since March at $1.057.
«The dollar is just a steamroller, it's absolutely extraordinary,» said Joe Tuckey, head of FX analysis at broker Argentex.
«It's just exceptionalism in the U.S., it's very hard to argue with. We're just seeing that consistently strong data there.»
A rally in the dollar did further damage to the Japanese yen, which fell past the 149 per dollar mark for the first time since October 2022, hitting 149.19. The dollar was last up 0.12% against the yen at 149.06.
The yen is sliding towards the 150 level that analysts and traders see as a likely red line for the finance ministry, whose warnings of possible intervention have stepped up in recent weeks. Investors have an eye on a Tuesday meeting of
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