The U.S. dollar index has entered its twelfth consecutive week of gains, and one of the main drivers of this dollar rally is U.S. Treasury yields. Take the ten-year U.S. Treasury yield, known as the benchmark for global asset pricing, which has recently hit record highs in 16 years, making external funds flock to this risk-free rate of return.
As for why the ten-year U.S. bond yield has risen so rapidly, the bottom line is that there is a serious oversupply in the U.S. bond market, the U.S. government’s accelerating expansion of debt, the Federal Reserve’s interest rate exceeding 5%, and the fact that traditional large buyers no longer support it, etc. A combination of factors contributed to this situation.
The bear market in U.S. debt prices continues to increase U.S. bond yields to maturity, which is a huge temptation for funds from other low-yield countries. The pursuit of higher yields by funds outside the United States has caused the dollar exchange rate to rise.
