(Bloomberg) -- A gauge of the dollar is marching toward levels last seen in March as Treasury yields pushed higher and traders mulled the possibility US interest rates may stay higher for longer.
The Bloomberg Dollar Spot Index rose 0.4% on Tuesday after US government bonds reopened lower after a holiday. Disappointing Chinese data also boosted the case for US exceptionalism, sending the yuan and China-linked currencies lower, with the Australian and New Zealand dollars among the worst performers.
“The outperformance of the US economy over the past few months has been a tailwind for the dollar,” Peter Dragicevich, strategist at Corpay, wrote in a note.
Bloomberg's dollar gauge has risen more than 4% from its year-to-date low in July as traders bet the Federal Reserve may have to hike rates further to cool inflation. The greenback has strengthened against every major currency in the past month.
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