SINGAPORE, October 2: The US dollar climbed to a 17-month high on Friday, heading for its third consecutive weekly gain as a global bond-market sell-off pushed borrowing costs higher and concerns about France’s finances weighed heavily on the euro.
The dollar index, which tracks the US currency against six major rivals, traded around 102.08, while the euro hovered near its weakest level since May 2025.
Dollar Heads for Third Weekly Gain
The dollar index was on course to gain around 1% for the week, marking its third straight weekly advance.
Demand for the US currency strengthened as investors reacted to volatility across global bond markets and uncertainty surrounding inflation and monetary policy.
Euro Pressured by French Fiscal Concerns
The euro traded near $1.1237, close to its lowest level in about 17 months.
Concerns over France’s public finances and political uncertainty have increased pressure on French government bonds, weakening investor sentiment toward the euro.
Global Bond Sell-Off Drives Market Volatility
Government bond markets experienced sharp selling as investors reassessed inflation risks, government borrowing and future interest-rate levels.
The yield on the benchmark 10-year US Treasury briefly reached 5.344%, its highest level since 2002, before easing.
French Bond Yields Rise Sharply
French government bonds have been particularly affected by worries about the country’s fiscal position.
Investors remain concerned about high public debt, budget deficits and whether planned fiscal measures will be sufficient to stabilise government finances.
Higher Oil Prices Add to Inflation Concerns
Oil prices above $100 per barrel have added another source of pressure for financial markets.
Higher energy costs could keep inflation elevated and make it more difficult for major central banks to lower interest rates quickly.
Markets Await US Jobs Report
Investors are now closely watching the latest US employment data for clues about the Federal Reserve’s next move.
A strong jobs and wage report could reinforce expectations that interest rates will remain elevated, while weaker numbers could reduce pressure for further tightening.
Yen and Swiss Franc Gain Safe-Haven Support
The Japanese yen and Swiss franc received some support as investors looked for safer assets during the market volatility.
Meanwhile, currencies including the British pound, Australian dollar and New Zealand dollar remained under pressure near multi-month lows.
Dollar Strength Reflects Wider Global Concerns
The latest rise in the dollar is being driven not only by US economic conditions but also by concerns elsewhere, particularly in Europe.
With bond markets volatile, oil prices elevated and investors focused on upcoming economic data, currency markets are likely to remain sensitive to changes in inflation, fiscal policy and central-bank expectations.
Source – Reuters / The Straits Times / Times of India
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