The yield on the UK's 30-year government bond surged to 6%, its highest level since 1998, as a global sell-off in sovereign debt continues, driven by persistent inflation and mounting fiscal pressures in major economies.
The British pound fell against a strengthening U.S. dollar as a global rout in government bonds sent the UK's 30-year borrowing costs to their highest level in nearly three decades.
The U.S. dollar held near two-month highs, weighing on Asian currencies, while the Japanese yen weakened after the Bank of Japan's latest meeting summary revealed a split among policymakers on the pace of future interest rate hikes.
The Japanese yen fell after Bank of Japan meeting minutes revealed divisions on future rate hikes, while a strong U.S. dollar, buoyed by high Treasury yields, exerted broad pressure on most other Asian currencies.
BCA Research has raised its three-month forecast for the U.S. Dollar Index to 105, citing the country's economic outperformance driven by AI-related capital spending and increasingly favorable real interest rate differentials.
The U.S. dollar is poised for its best month since June, supported by rising energy costs and expectations of further Federal Reserve rate hikes ahead of key U.S. inflation and jobs data.
The British pound and the euro declined against a strengthening U.S. dollar on Tuesday, as rising oil prices driven by U.S.-Iran tensions bolstered safe-haven demand for the greenback.
The U.S. dollar maintained its strength near a two-month peak, fueled by soaring Treasury yields and expectations of further Federal Reserve tightening. The Australian dollar fell to its lowest level since August, even after its central bank raised interest rates as expected.
Wells Fargo Investment Institute has raised its outlook for the U.S. dollar through the end of 2027, projecting continued strength against the euro and yen due to the Federal Reserve's aggressive inflation-fighting stance.
