Investing.com — The U.S. dollar took a breather on Thursday, as the Treasury bond market halted a rout. The greenback was also pressured by a slight rebound in the euro.
At 15:52 ET (19:52 GMT), the U.S. dollar index, which tracks the world’s premier currency against a basket of six major peers, slipped 0.1% to 102.12. Meanwhile, the euro, which forms the largest component of the U.S. dollar index, gained 0.2% to $1.1214.
Dollar consolidates near 18-month high
While the greenback lost some steam, it remains near its highest level since April 9, 2025.
Its advance has been driven by a steep rise in borrowing costs in the U.S. and across the globe, driven by oil-related inflationary concerns, jitters over the massive amounts of debt being issued by companies to fund their artificial intelligence infrastructure buildouts, a hawkish tilt to central banks around the world, and ballooning fiscal debt, especially in countries like France.
“Technically, the dollar has broken out above a double bottom and surpassed the June highs near 101.75. Momentum remains bullish and positioning has reset from crowded levels registered over the summer. The next area of resistance sits near 102.86, followed by the 106 107 range,” Adam Turnquist, chief technical strategist at LPL Financial, said.
U.S. Treasury yields finally halted their relentless upward trajectory on Thursday, with the benchmark 10-year yield last down 5.5 basis points to 5.223% and the 30-year down 5.6 basis points to 5.605%.
Despite the overall bond rout, watchers of monetary policy remain mostly convinced that the Federal Reserve will not raise interest rates later this month. As per the CME FedWatch tool, the odds of the Fed holding rates steady stand at nearly 81%, compared to almost 76% a week ago and about 54% a month ago.
The reduction in rate hike bets has been driven by economic data this month that showed U.S. economic expansion, softer-than-expected inflation growth, and a weak jobs report.
On Thursday, the U.S. Department of Labor said the number of Americans filing for initial jobless claims in the week ending October 3 fell to 197k, the lowest reading since the week ending July 18. The four-week moving average for jobless claims ticked down to 198k.
The claims update comes a day after the release of the minutes of the September Fed monetary policy meeting, which showed that most policymakers saw another interest rate hike by the end of this year.
French fiscal shadow dominates Euro trajectory
Across the Atlantic, the euro did inch up, but the single currency remained severely hobbled after dropping to its lowest level since May in earlier sessions. The euro’s persistent weakness reflects a broader liquidation of French sovereign assets that has sent shockwaves across European debt and foreign exchange bourses throughout the week.
