Forex
Home›Forex›Major Pairs›US 10-year yield hits three-year high, Dollar stays ne…
US 10-year yield hits three-year high, Dollar stays near support
The 10-year Treasury yield broke above 4.81% and neared 4.85% while the Dollar Index held around 98.72, testing support near 98.56 to 98.68.
US Treasury yields pushed higher again, with the 10-year note breaking above 4.81% to a three-year high near 4.85%, its highest level since November 2023. Despite that typical currency positive move, the Dollar Index largely failed to extend higher, sitting near support instead.
According to Action Forex, the divergence points to markets focusing less on the level of yields and more on why they are rising. A rise tied to tighter Federal Reserve expectations can be dollar supportive, but a move driven by inflation compensation, term premium, and fiscal concerns can play out differently for currency demand.
The backdrop also includes energy price risk. Brent’s break above $100 followed renewed escalation in the US-Iran conflict and renewed attacks on shipping, strengthening the case for persistent elevated energy prices and adding pressure for bondholders to demand compensation for future inflation.
Action Forex also highlighted a policy episode during the move, when Treasury Secretary Scott Bessent announced a repurchase of up to $6 billion of 10- to 20-year Treasuries, triple the size of a typical $2 billion operation. Roughly half an hour later, the 10-year yield climbed to about 4.84% before reaching approximately 4.85%, while the dollar remained pinned near its support zone.
Latest closeBrent $102.05 ▲4.2%|Dollar index 98.78 ▼0.1%