High Yield On Treasuries Ignites Dollar Rally

Surging US real yields are fueling a rebound in the dollar, rewarding bullish investors while making bearish bets against the currency less attractive, according to a report by Saqib Iqbal Ahmed for Reuters.

The real yield on US 10-year Treasuries, which measures how much investors stand to make on US government bonds after accounting for inflation, reached 2.47%, the highest level in nearly 15 years.

The real yield on US 10-year Treasuries, which measures how much investors stand to make on US government bonds after accounting for inflation, reached 2.47% on Tuesday.

This is the highest level in nearly 15 years, as per data from the US Treasury Department. This surge in real yields has made betting on the US dollar more profitable for bullish investors, as they can earn a yield while holding onto their dollar positions.

As a result of these developments, the dollar has gained 7% from its 2023 lows against a basket of currencies and is currently at a 10-month high.

Additionally, rising real yields have made it more expensive for investors to bet against the dollar, as those establishing short positions have to pay higher costs to borrow the currency.

Data from the Commodity Futures Trading Commission (CFTC) shows that dollar positioning in futures markets revealed a net long position of $3.07 billion for the week ending September 26.

This marks a significant reversal from an earlier short position of $21.28 billion earlier in the year.

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