The dollar index hovered near 102 on Tuesday, close to its strongest level since April 2025, as the euro came under pressure from mounting political uncertainty and fiscal concerns across Europe. The common currency fell as much as 0.8% on Monday amid anxiety over elevated debt levels and political deadlock in France, while the prospect of a snap election in Spain added to the headwinds.
The dollar was further supported by a sharp rise in US Treasury yields, with long-term yields climbing to their highest levels in more than two decades. The moves reflected a continued global bond selloff, driven by increasing fiscal risks and persistent inflation worries.
ISM data indicated that cost pressures in the US services sector accelerated last month at their fastest pace in more than four years. At the same time, futures markets are pricing in roughly a 78% probability that the Federal Reserve will keep interest rates unchanged at its upcoming meeting, following weaker-than-expected US employment figures.
