US Dollar Hits 17-Month High Against Euro
The US dollar reached its highest level against the euro since May 2025 as global bond selloffs pushed Treasury yields to 24-year highs.
The U.S. dollar reached a 17-month high against the euro on Thursday, with the euro falling below $1.123. This movement marks the weakest point for the euro since May 2025 and coincides with the dollar index hitting its highest level since April 2025, completing six consecutive quarters of gains against a basket of currencies.
The currency shift was driven by a global government bond selloff that pushed U.S. Treasury yields to their highest levels since 2002. Market volatility stemmed from deteriorating government finances, high issuance volumes, and rising inflation linked to oil prices. While August inflation data in the United States arrived lower than expected—reducing immediate expectations for a Federal Reserve rate hike this month—the dollar continued to strengthen.
Contributing factors included surging inflation within the euro zone and instability in French bond markets. The euro also declined against the yen and Swiss franc as investors reacted to the confluence of high Treasury yields and fiscal instability in Europe.
