Dollar hits 16-month high on euro and Swiss franc as US yields top 5%
TLT•The dollar reached 16-month highs against the euro and Swiss franc as the 10-year Treasury yield settled above 5%. The dollar index rose 0.2% to 101.40, while traders cut the implied chance of a Fed rate hike at its next meeting to about 52% from 70%.
1. Dollar gains
The dollar rose to 16-month highs against the euro and Swiss franc on Tuesday as investors positioned for economic data and Treasury yields stayed near multi-year highs. The 10-year Treasury yield settled above 5%, after touching its highest level since June 2007. The dollar index rose 0.2% to 101.40, its highest level since July 28.
2. Data and Fed outlook
Investors were awaiting the August Personal Consumption Expenditures index on Wednesday and September nonfarm payrolls on Friday. New York Fed President John Williams said the Fed had time to weigh data before deciding when to raise rates again, while Fed Governor Michael Barr made a case for further hikes. Futures showed a near 52% chance of a rate hike at the next meeting, down from 70% a day earlier.
3. Other currencies
The euro fell to $1.1312, its lowest level against the dollar since May 2025, and was last down 0.26% at $1.1341. The dollar gained 0.17% to 0.834 against the Swiss franc. The Australian dollar fell 0.43% to $0.69888 after Australia's central bank raised its cash rate to 4.60%, a 15-year high.
