The dollar surged on Friday, driven higher by a rising yield on U.S. Treasury notes.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at a two-week high, rising 0.59% to 90.17 by 10:32 AM ET (14:32 GMT)
U.S. bond yields crept back up on Friday, with the United States 2-Year note climbing to its highest level since September 2008, at 2.449. The yield on the United States 10-Year Treasury note rose to 2.940.
Prices fall as bond yields rise. A spike in U.S. Treasury bond yields in February led to a steep decline in equity markets, as investors flocked to the dollar in anticipation that inflation could lead to an increase in interest rate hikes by the Federal Reserve.
The dollar gained ground against the yen, with USD/JPY rising 0.40% to 107.79.
The pound was lower amid dovish comments from Bank of England Governor Mark Carney, as investors grow uncertain of a rate hike in May. GBP/USD fell 0.50% to 1.4017.
The euro was down, with EUR/USD falling 0.65% to 1.2266 as investors worry that the euro zone’s economy is rebounding and the European Central Bank could wait to tighten monetary policy.
The loonie was lower after disappointing inflation and retail data. USD/CAD rose 0.46% to 1.2729 after inflation rose by 2.3% in March. A separate report showed that retail sales rose by just 0.4% in February.
Elsewhere, the Australian dollar was lower, with AUD/USD down 0.92% to 0.7657 while NZD/USD decreased 0.87% to 0.7207.