US Dollar Extends Streak, Surges as Treasury Yields Rise

Dollar Strengthens for Fifth Straight Day, Rises 1.5% for the Week

The US dollar continued its winning streak on Friday, surging to a fifth consecutive day of gains and marking its largest weekly percentage rise in two months. The dollar index, which measures the greenback against a basket of currencies, rose 0.32% to 99.27, with the euro down 0.39% at $1.1623 after hitting a five-week low of 1.1617.

The dollar's advance comes as US Treasury yields continue to ascend, with the benchmark 10-year Treasury note reaching 4.599%, its highest in a year. A raft of economic data earlier this week pointed to rising price pressures, fueled by energy supplies through the Strait of Hormuz remaining largely blocked due to the Iran war.

Read also: TrueFan AI Secures $10 Million in Funding Led by Baring PE India and Z3Partners

The dollar's strength is also driven by market expectations for the Federal Reserve's monetary policy path, which have tilted further toward possible rate hikes. Several Fed officials this week indicated that keeping inflation pressures in check was a top priority, while others did not rule out the possibility that rate hikes may be needed if price pressures continued to mount.

Federal Reserve Bank of New York President John Williams said late on Thursday that he did not see a need right now for the central bank to weigh any change in interest rate policy amid the uncertainty created by the Middle East war, as monetary policy was in a "good place."

Markets are now pricing in a 49.5% chance the Fed could hike rates by at least 25 basis points at its December meeting, compared with 14.3% a week ago, according to CME FedWatch. The yield on benchmark US 10-year notes was last up 13.6 basis points at 4.595%, on pace for its biggest daily jump since April 9, 2025.

The dollar's advance also comes as West Texas Intermediate crude jumped 4.16% to $105.38 a barrel and Brent rose to $109.34 per barrel, up 3.42% on the day, after comments by US President Donald Trump and Iran's foreign minister further dented hopes of a deal to end ship attacks and seizures around the Strait of Hormuz.

Read also: Nifty 50 Faces Uphill Battle Against Bank Nifty as Trading Remains Range-Bound