20-Year Yield Highs Fail to Offer Any Support to Dollar Index

The Dollar Index is currently trading near 99.65, and despite U.S. 20-year Treasury yields sitting at their highest levels in nearly two decades, this long-term rate advantage has failed to provide substantive support for the dollar. According to the English summary, yields have only pushed the Dollar Index up by 0.03 points, and spot remains above 99.50 after a 17-point intraday range, but continues to trade below the flattening 200-day exponential moving average near 99.75, which has capped every rebound attempt over the past two weeks.

**Long-Term Yields Decouple from the Dollar**

Under the traditional framework, rising Treasury yields often support the dollar through the interest rate differential channel, but the current highs in 20-year yields have not translated into dollar buying. Market reports indicate that after the Dollar Index faced resistance near 100 on a rebound, easing trade expectations continue to weigh on the currency. Analysts at CICC Research believe that as dollar interest rates gradually return to a relatively neutral level, the Dollar Index may enter a new phase of volatility, with the long-term uptrend facing a test.

**Technical Resistance Remains Pronounced**

The 200-day exponential moving average continues to pose overhead resistance, with the Dollar Index failing to break through on multiple rebound attempts. The English summary notes that this moving average has capped every rebound attempt over the past two weeks, indicating that technical selling pressure remains firm. Current trading levels near 99.65 remain below the moving average, and without new catalysts, the scope for rebounds may stay limited.

**Non-U.S. Factors and Policy Expectations Intertwine**

Uncertainty from outside the United States is also weighing on the dollar's trajectory. Reports indicate that political uncertainty in France is affecting euro sentiment, Japan's Takakura administration's policy mix is driving yen performance, and the UK's new budget is unsettling sterling expectations. Meanwhile, the Trump administration's preference for a "weak dollar" and market expectations for further Federal Reserve rate cuts are also pressuring the dollar over the medium term. Analysts caution that shifts in geopolitical factors could further amplify volatility in the foreign exchange market.