The dollar rose to a 20-year high on Monday, as a combination of rising US Treasury yields and closings in China boosted the dollar’s safe-haven appeal.
Against a basket of major currencies, the dollar index exceeded 104.19 for the first time since July 2002, continuing its rise by 9% this year.
The dollar’s rally was supported by a relentless rise in US Treasury yields.
On Monday, the yield on the benchmark 10-year note was 3.18% for the first time since November 2018, and has doubled in the past two months.
And the pace of the Fed’s rate hike cycle is much faster than its counterparts, the Bank of England and the European Central Bank.
Money markets expect the US to raise interest rates by another 200 basis points over the remainder of the year, raising benchmark interest rates to nearly 3%.
The growth-sensitive Australian dollar fell 1% to $0.6999, its lowest since February. The British pound and the New Zealand dollar reached their lowest levels in 22 months, while the euro and the yen did not record a noticeable increase from the recent lows.
Cryptocurrencies pulled back on a rally away from risky assets, and bitcoin was close to this year’s lows of $33,500, while Ether, which fell 4% on Sunday, was at $2,440.
