The highest long-dated US yields in nearly two decades have moved the Dollar Index by three hundredths of a point.
Spot holds just above 99.50 after a session range of 17 pips, still beneath a flat 200-day Exponential Moving Average (EMA) near 99.75 that has capped every attempt for a fortnight
The differential that never opened A thirty-year Treasury yield around 5.3%, its highest since June 2007, would ordinarily be a Dollar story on its own. It is not one here, because the same move is happening everywhere. Japan’s 10-year sits at a three-decade high, Germany’s 30-year at its firmest since 2011 and France’s 30-year at levels unseen since 2008, with the United Kingdom, Italy, Switzerland and Canada all higher.
Currency is a relative price and this is an absolute move. Yields lift a currency only when they rise faster than the other side of the pair, and a synchronised widening in term premium opens no gap for anyone. The index carries a 57.6% euro weight, so a German long end selling in step with the American one neutralises more than half the basket before the other five currencies are counted.