Dollar set for weekly gains as Treasury yields surge, Fed bets build
TLT•The dollar was set for its first back-to-back weekly gains in more than three months as rising Treasury yields and bets on further Federal Reserve rate hikes supported the currency. The dollar index rose more than 1% this week to a two-month high, then traded slightly lower at 101.2.
1. Dollar gains momentum
The dollar was set for a second straight weekly gain on Friday, its first such run in more than three months, as markets raised expectations for further Federal Reserve rate hikes. The euro fell to a two-month low of $1.1370 and was headed for a third weekly loss, while sterling hovered near a three-month low of $1.3220. Long-dated U.S. Treasury yields reached their highest in more than 20 years.
2. Yen rebounds
The yen rose more than 0.4% from a three-week low to 158.15 per dollar after Japan’s Finance Minister Satsuki Katayama said U.S. President Donald Trump had raised concerns about yen weakness. Katayama said she and Treasury Secretary Scott Bessent would stay in close contact as officials stepped up warnings. Goldman Sachs lowered its 12-month dollar-yen forecast to 150 from 165.
3. Other currency moves
The Australian dollar edged up to $0.7018, while the New Zealand dollar was flat at $0.5659. The Reserve Bank of Australia is expected to raise rates by 25 basis points to 4.60% next week, which would be its final increase in the tightening cycle, the article said.
