The US dollar remained strong on Friday, trading near its highest level in 19 months after making major gains throughout the week. The dollar has been supported by growing expectations that the Federal Reserve may raise interest rates more quickly. This has pushed the Japanese yen closer to the 160 level against the dollar, raising concerns that Japanese authorities may step in to support their currency.
The dollar’s strength has also been supported by rising US Treasury yields as investors continue to watch for signs that the Federal Reserve could deliver a larger interest rate increase next month.
Yields on two-year US Treasury bonds jumped 34 basis points over the past two trading sessions. This was their biggest two-day increase in three and a half years, making the dollar more attractive to investors compared to other major currencies.
Meanwhile, the euro fell 0.1% to $1.1049, moving closer to its lowest level against the dollar since April 2025.
For the week, the euro is down around 0.8% and is heading for its biggest weekly loss since late September as the US dollar continues to gain strength and expectations of tighter US monetary policy increase.