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Dollar Soars for Third Week as US Treasury Yields Hit 2002 High Amid Inflation Fears
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CNBC TV18•02-10-2026, 08:04
Dollar Soars for Third Week as US Treasury Yields Hit 2002 High Amid Inflation Fears
- •The US dollar achieved its third consecutive week of gains, reaching a 17-month high as a global bond market sell-off pushed borrowing costs to multi-decade peaks.
- •Benchmark US 10-year Treasury yields surged to 5.344%, their highest since 2002, driven by inflationary concerns over rising oil prices and ahead of a crucial US jobs report.
- •The euro fell to its lowest level since May 2025 due to worries about France's fiscal health, while the yen remained steady despite accelerating core inflation in Tokyo.
- •Analysts suggest the rise in long-end yields is increasingly about term premium and fiscal risk, rather than just the Federal Reserve's immediate rate hike decisions.
- •The dollar's recent strength is partly attributed to problems in Europe, including political risk and the energy shock from the Middle East conflict, rather than solely US economic exceptionalism.
Key Questions Answered
Benchmark US 10-year Treasury yields rose to 5.344%, hitting their highest level since 2002, amid a steep global bond sell-off driven by sticky inflation, heavy government borrowing, large bond supply, and inflationary fears over higher oil prices.
The euro dropped to $1.1237, hugging its lowest level since May 2025, weighed down by mounting political risks, concerns regarding France's fiscal health, and an energy shock stemming from the conflict in the Middle East.
Traders pared back wagers on an immediate Fed rate hike after consumer prices rose less than expected in August alongside downward revisions to July figures, prompting policymakers to await additional economic data before making decisions.
