Shafaqna English– The dollar 17-month high bond rout story shaped currency markets on Friday. The US dollar climbed toward a third consecutive weekly gain. It reached its highest level in 17 months. A sharp sell-off in global bond markets pushed borrowing costs to their highest in decades. Investors were also worried about inflation caused by higher oil prices. Together, these forces drove the dollar 17-month high bond rout narrative.
A sharp global bond sell-off on Thursday stunned investors. It pushed yields on benchmark US 10-year Treasuries to 5.344%. That was the highest level since 2002. The timing mattered. The move came just before a US jobs report that could shift the near-term policy outlook. The dollar 17-month high bond rout link is clear: rising yields attract foreign capital and support the dollar.
Higher US yields make dollar-denominated assets more attractive. This pulls capital into the US currency. At the same time, inflation fears from rising oil prices add to the pressure.
Source: Reuters
Dollar in wait-and-see mode