US 2-year Treasury yields surged over 6% since the Iran war, outpacing peers and supporting a stronger Dollar Index outlook.
The US Dollar Index shows potential for additional gains as US 2-year Treasury yields have climbed more than 6% since the outbreak of the war with Iran. The Dollar Index has advanced modestly in comparison, suggesting room for further rallying backed by rising rate differentials.
Prior to the conflict, 2-year yields remained in a 3.4-3.7% range despite strong economic growth and inflationary pressures. During the same period, the Dollar Index traded between 96 and 101, with EUR/USD fluctuating between 1.14 and 1.21.
US yields are now rising faster than those in other major economies, reinforcing the Dollar’s upward trajectory. The trend indicates continued strength, though short-term volatility may persist.