US dollar headed for third straight week of gains

The dollar index set for a 1% gain this week, its ​third consecutive weekly rise, a run it last had in May 2025

The US dollar headed for its third straight week of gains on Friday, as a bond market rout in the face of inflationary fears ​over higher oil prices and concerns over French fiscal health kept the euro rooted near its lowest in 17 months.

Investors were reeling from a steep international bond selloff on Thursday that sent yields on benchmark US 10-year Treasuries to 5.344%, their highest since 2002, before bargain hunters stepped in to help stabilise the market.

The 10-year yield was last at 5.247% on Friday while the rest of the bond market also steadied as traders braced for US jobs data that could influence the near-term ​policy outlook after a soft inflation report dented October rate hike bets.

The euro was at $1.1237, hugging its lowest level since May 2025. The yen firmed ​a bit to 157.84 per US dollar after data showed annual core inflation in Tokyo accelerated in September at the fastest ⁠pace in 10 months.

The dollar index set for a 1% gain this week, its ​third consecutive weekly rise, a run it last had in May 2025.

Moh Siong Sim, currency strategist at OCBC in Singapore, said the initial move higher in yields ​was because of rising energy prices, but that was overshadowed by European fiscal risk concerns.

The underperformance of French and Italian government bonds relative to US Treasuries and German Bunds points to a flight into the most liquid and defensive sovereign markets, he said.

The dollar strength is mostly skewed towards European currencies with the exception of the Swiss franc, which has seen ​a bit of revival in its safe haven status, he said.

The Swiss franc was 0.17% firmer at 0.8293 per US dollar. It was last at 0.9333 per ​euro after rising more than 1% in the previous session.

The dollar strength pushed sterling and the Australian dollar to their respective three-month lows before steadying a bit. The New Zealand dollar was ⁠0.14% firmer at $0.5614 after hitting its lowest level since November 2025.