US 10-year Treasury yield falls 15 basis points over the week; dollar heads for first weekly loss in five weeks

US government bond yields fell over the week, and the US dollar headed for its first weekly loss in five weeks, Reuters reported, as lower yields reduced the currency’s appeal.

The 10-year Treasury yield ended Friday 16 October at 5.09%, according to US Treasury daily data. A week earlier it was 5.24%. The 2-year yield ended the week at 4.74%, down from 4.80%, and the 30-year yield at 5.43%, down from 5.60%. Yields move in the opposite direction to bond prices.

The week included hotter-than-expected inflation data. US consumer prices rose 3.7% in the year to September, against forecasts of 3.6%, and producer prices rose 6.3%, the biggest rise since 2022, CNBC reported.

Comments from Fed officials signalling no urgency to tighten policy helped steady yields and reduced support for the dollar, CNBC reported. The dollar index fell 0.17% on Friday to 101.87 and was set for a weekly fall of 0.35%.

The euro was at $1.1227, on track for a 0.23% weekly gain. Sterling rose to $1.3314, up 0.63% on the week, and the dollar was at 158.11 yen. The Australian dollar was buying 69.47 US cents, AAP reported.

“What I found most interesting today and more broadly this week, is how closely the dollar has been tied to the AI trade,” said Matt Weller of StoneX.

The CME FedWatch tool put the probability of the Fed leaving rates unchanged at its 27-28 October meeting at 83%, up from 49% a month earlier, CNBC reported.