Investing.com - The dollar slid lower against a currency basket on Thursday as a global sell-off in equities and bonds gathered momentum, spurred by worries over the impact of rising interest rates.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.16% to 95.07 by 03:53 AM ET (07:53 AM GMT), after falling as low as 94.88 overnight.
Stock markets across Europe tumbled following steep overnight losses in Asia and the largest decline for U.S. stocks in more than eight months on Wednesday as rising U.S. Treasury yields spurred a flight from risky assets.
10-year Treasury yields hit the highest level in seven-and-a-half year highs earlier this week amid expectations for a faster than expected pace of rate hikes from the Federal Reserve as the outlook for the U.S. economy remains strong.
The sharp falls on Wall Street prompted U.S. President Donald Trump to once again criticize the U.S. central bank on Wednesday, calling the Fed “crazy” for its plans to continue gradual rate hikes in the coming months.
The yield on 10-year Treasury notes firmed on Thursday amid increased aversion.
The dollar steadied against the safe haven yen, with USD/JPY last at 112.28, recovering after slumping to a three-week low of 111.98 overnight.
The yen has been boosted this week after the International Monetary Fund cut its global growth forecast, warning that trade conflicts are starting to have a serious impact on the global economy.
The euro pushed higher against the dollar, with EUR/USD rising 0.24% to 1.1549.
The euro’s gains were held in check amid an ongoing row between Italy’s populist government and Brussels over the country’s budget plans.
The pound was little changed for the day, with GBP/USD at 1.3188 as speculation continued over whether Britain will secure a deal before its exit from the European Union.