The US dollar touched its strongest level in six months while Treasury yields jumped sharply higher on Tuesday as investors focused on the risk of a resurgence in inflation during a second Donald Trump presidency.
The dollar index, which tracks the US currency against a basket of peers, rose as much as 0.6 per cent to its highest level since May, and by Tuesday evening was up 0.4 per cent for the day.
The yield on the benchmark 10-year Treasury, which rises when prices fall, leapt 0.11 percentage points to 4.42 per cent, close to the highs hit in the immediate aftermath of last week’s election. The two-year yield, which is more sensitive to short-term interest rate expectations, rose 0.08 percentage points to 4.34 per cent.