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Treasuries extend sell-off, dollar rallies 1.1% against euro

US Treasuries extended their sell-off on Friday, pushing yields sharply higher, as the latest jobs report underscored the strength of the world’s most important economy and heightened the odds of another interest rates hike this year.

The yield on the 10-year note rose as much as 6.2 basis points to 2.2834 per cent while that on the more policy sensitive 2-year note climbed nearly 3bps to 1.3669 per cent as investors sold US government bonds. Yield moves inversely to price.

The higher Treasury yields also gave the dollar a lift. The DXY index was 0.8 per cent higher at 93.56, with the greenback up against all of its major trading peers.

The US currency rallied 1.1 per cent against the euro, shot up 0.8 per cent against the Japanese yen and was trading 0.7 per cent higher against the British pound sterling.

“Those hoping that the USD would be thrown a lifeline may be in luck,” said Jameel Ahmad, vice president of corporate research at FXTM. “I would expect the Dollar to receive a bid following this employment report and with this in mind, it provides a subtle reminder to investors, that the USD is oversold on an economic basis.”

Gold, which offers no yield, slid however, with prices down 0.9 per cent to $1,257.33 per troy ounce.