Demand for U.S. dollar soars Monday as Treasury yields rise

Lola Evans
03 Oct 2023, 04:53 GMT+10

The U.S. dollar jumped sharply on Monday, extending its recent months-long rally.
The euro crumbled to fall below the crucial 1.05 level, while the British pound tumbled below 1.2200.
Commodity currencies were under pressure with sharp losses being recorded in particular by the Canadian and Australian dollars.

NEW YORK, New York - The U.S. dollar jumped sharply on Monday, extending its recent months-long rally.

The euro crumbled to fall below the crucial 1.05 level, while the British pound tumbled below 1.2100.

Commodity currencies were under pressure with sharp losses being recorded in particular by the Canadian and Australian dollars.

Treasury yields were elevated adding to the demand for the dollar. The 10-year U.S. Treasury yield topped 4.70 percent, its highest level in 16 years.The euro was pierced when the September PMI for Europe continued lower.

In late-afternoon trading on the U.S. east coast, the euro was changing hands at 1.0480. The Japanese yen eased to 149.85.

The British pound was unwanted at 1.2088, its lowest level in more than six months, while the Canadian dollar dropped sharply to 1.3676.

The Swiss france fell to 0.9181, while the usually robust Australian dollar was at sea, trading at 0.6364, a full cent below its Friday close.

The New Zealand dollar was least damaged, sliding to 0.5944.

The disarray in markets, despite the stopgap bill to extend the government shutdown threat to 45 days failed to turn the tide.

"If we had had a shutdown, that really would have put the Fed in a really tough spot for that November meeting," Michael Lorizio, senior fixed income trader at Manulife Investment Management in Boston told Reuters Monday.

"You would have essentially had to price out any chance of any sort of Fed action if they had no data to base their next move on."

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