Global bond selloff boosts dollar, pressures euro
The US dollar surged to a 17-month high against the euro on Thursday as a global bond selloff pushed up US and European government yields to record highs. The euro fell below $1.1215 for the first time since May 2025, while the dollar has been gaining strength over the past few months. Higher yields can be attributed to concerns about fiscal policy, weak French bond markets, energy prices, and rising inflation.
Both the euro and the yen experienced declines against the US dollar, while the Swiss franc and British pound fared less poorly. US inflation figures released on Wednesday showed a smaller-than-expected increase in August, and downward revisions to July's figure, which damped expectations for a Federal Reserve rate increase this month.
However, the threat of rising energy prices continued to weigh on the global economy. The dollar index climbed 0.51 percent on the day, its strongest level since April 2025.
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