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| The USD spot index continued to increase in the session on September 26. (Source: Spiderum) |
As the US Federal Reserve looks set to keep interest rates high for longer than expected, investors have few safe havens to turn to, other than the world 's reserve currency.
The decline in the US government bond market is increasing demand for the US dollar, contributing to increased profits for buyers of the greenback and maintaining this upward momentum.
Investors face a third straight year of losses as the $25.5 trillion U.S. government bond market loses steam amid liquidity concerns, unprecedented monetary tightening by the Fed and surging issuance.
The US dollar spot index, according to Bloomberg , continued to rise in Asia on September 26 and increased more than 2% since the beginning of the month, while other safe assets almost all lost.
This proves that the USD is once again showing itself to be the only "safe haven" amid concerns about the risk of a US government shutdown.
Government bonds around the world are plunging, heading for their worst month in a year, while the Japanese yen and Swiss franc have lost more than 2% of their value. Gold has also fallen. Bitcoin has gained only modestly, though it is still down 14% this quarter.
Bond yields rose to new multi-year highs on September 26, as the yield on the 10-year bond rose to 4.56%.
It was a continuation of the previous session's strong gains, even after Moody's Investors Service, the only major credit rating agency that still rates the United States at its highest level, signaled that confidence was wavering over the threat of a government shutdown.
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