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The US dollar headed for a third straight week of gains on Friday while perched at a 17-month high, Reuters reported from Singapore. The currency’s strength reflected a sharp sell-off in global bonds the previous day that pushed borrowing costs to their highest levels in years amid worries over sticky inflation and elevated oil prices. The dollar index, which tracks the greenback against six major peers, stood at 102.08 and was set for a 1 percent weekly advance, matching a run last seen in May 2025. Data compiled by the news service showed this performance capped a period of sustained dollar appreciation.
A steep global bond sell-off on Thursday had sent yields on benchmark US 10-year Treasuries as high as 5.344 percent, their highest since 2002, Reuters said. The yield eased to 5.249 percent in early Friday trading as parts of the bond market steadied ahead of a closely watched US jobs report. According to Reuters, this bond market rout formed part of the largest quarterly rise in Treasury yields since 1994, amplifying pressure across global fixed-income assets. The moves underscored investor repricing of risks tied to government borrowing and energy costs.
The euro slipped to $1.1237, hovering near its lowest level since May 2025, as concerns over France’s fiscal health dragged the single currency lower, the report noted. Worries about the country’s shaky public finances and potential political fallout contributed to a nearly 2.5 percent decline for the euro in September, its largest monthly drop since July 2025. The Japanese yen held around 158 per dollar after official figures showed annual core inflation in Tokyo accelerated in September at the fastest pace in 10 months, Reuters added. These currency shifts highlighted divergent pressures facing major economies.
Charu Chanana, chief investment strategist at Saxo, said investors are confronting the uncomfortable mix of sticky inflation, heavy government borrowing and large bond supply. Her assessment, carried in the Reuters dispatch, pointed to the challenges facing markets as central banks navigate persistent price pressures. The combination has reinforced the dollar’s appeal while exposing vulnerabilities in other currencies tied to regional fiscal or inflation dynamics.
Reuters noted that the dollar has now recorded its sixth straight quarter of gains against a basket of currencies through the end of September, the longest such stretch since 2022. This sustained run has come even as some inflation readings moderated, with longer-term yields continuing to climb on expectations of prolonged higher interest rates. The currency’s performance also reflects its role as a benchmark for oil revenues, a factor particularly relevant for Gulf producers whose export earnings benefit from dollar strength during periods of elevated crude prices.
The developments unfolded ahead of a US employment report due later Friday that could further shape expectations for Federal Reserve policy in coming months, according to the news service. Stronger-than-anticipated labor data in recent weeks had already fueled speculation of additional rate hikes, even after a softer personal consumption expenditures reading. Markets were monitoring whether the jobs figures would reinforce the bond sell-off or prompt any reversal in yields that might temper the dollar’s advance.
