U.S. Dollar Collapse as Bond Yields Rise

USD Under Pressure: What I’m Watching as Volatility Returns

As I watch the markets this week, one thing becomes clear: the US dollar is in a fragile spot. Yields are flirting with the 5% mark again, particularly on the 10-year, but the greenback can’t seem to hold its ground. In fact, it's slipping back below the 100 level—trading at $0.99 now—and that signals more than just technical weakness. It reflects deepening concerns about US fiscal stability and global confidence in American assets.

What’s driving this? For starters, the mounting debt burden and renewed fiscal uncertainty are eroding investor confidence. The latest G7 talks underscore a more fragmented global outlook, and the tone is cautious, if not outright defensive. There's a sense that markets are bracing—not just for economic data, but for policy missteps, unexpected shocks, and political risk.

When I say "markets," I’m not just referring to charts or candles. I mean real people—investors, institutions, central banks—all reassessing risk. The shift is tangible. You can see it in gold edging higher, safe haven currencies like the Japanese yen and Swiss franc gaining traction, and in equity market hesitation.

At the same time, volatility has spiked, but there's no clear direction. That tells me we’re in a transition period. Investors are waiting for clarity—on inflation, rates, geopolitics—and in the absence of it, they’re cautious. That’s what makes the current environment particularly challenging. We get sharp moves, but little conviction.

I also notice how central banks are playing a more reactive game. Monetary policy isn’t the anchor it used to be. With inflation appearing to stabilise in some regions, but growth still uncertain, the global policy response is fractured. In the US, the Fed’s messaging is becoming less predictable, with more weight given to supply-side concerns and market reactions.

This sets up a scenario where I need to stay more adaptive than ever. Risk-on, risk-off switches are happening fast—what was in favour last week might be out this week. And I find myself spending more time analysing macro flows, rather than chasing momentum.

It’s also a reminder of how interconnected everything remains. A shift in Treasury auction demand, a headline out of Asia, or a comment from a central banker can turn sentiment on a dime. That’s the world I trade in—and it’s why I stay plugged in every day.

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