Dollar reaches 17-month high against euro — Channel NewsAsia

The US dollar on October 1 reached a 17-month high against the euro amid a sell-off in government bonds in the United States and Europe, which pushed yields to new peaks. The euro fell below the $1.123 mark for the first time since May 2025. Channel NewsAsia reports.

As of the latest trading, the European currency was down 0.79% at $1.1238. In September, the euro lost almost 2.5%, its largest monthly decline since July 2025.

Rising yields

The yield on benchmark 10-year US government bonds reached its highest level since 2002 during trading. It later fell by 2.28 basis points to 5.272%.

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Brian Daingerfield, head of G10 FX strategy at NatWest Markets, linked the rise in yields to concerns over fiscal policy, weakness in the French bond market, energy costs and inflation. According to him, the market also expects further monetary policy tightening by central banks, including the US Federal Reserve.

Other currencies and bonds

The euro also declined against the Japanese yen and the Swiss franc and barely remained in positive territory against the pound sterling. Yields on French government debt securities, pressured by concerns over France's finances, rose to a new 14-year high. German bonds also came under pressure.

The dollar index rose 0.57% and reached its highest level since April 2025. At the end of September, the US currency completed its sixth consecutive quarter of gains against a basket of currencies, the longest such streak since 2022. The Japanese yen weakened by 0.11% to 157.6 yen per dollar, while the Australian dollar fell to a two-month low after domestic inflation data came in weaker than expected.