That unusual surge in the dollar is coming thanks (in part) to Donald Trump

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The dollar index raced higher, in an unusually swift move against the yen and other currencies, as short-end bond yields spiked to a six-and-a-half year high.

Currency investors pinned the move on Wednesday's stronger-than-expected durable goods report, coupled with longer-term expectations that a stimulus plan from President-elect Donald Trump will rev up the U.S. economy and possibly force an earlier cycle of interest rate increases from the Federal Reserve.

As for the bond market, strategists said while durable goods and the rising dollar were a factor, they also pointed to developments Europe.

"We had decent data in the U.S. We also have U.K. yields, which are rising on the Treasury statement which projects a significant increase in borrowing post-Brexit," said Boris Rjavinski, director, rates strategy at Wells Fargo. The U.S. 2-year yield, the sector most sensitive to the Fed, jumped to 1.14 percent, its highest level since April of 2010.

But there was also action related to the European Central Bank, which moved sovereigns in Europe and sent ripples through the U.S. market. The German 2-year bund yield retraced some of its losses, and was around -0.70 percent. The 10-year bund yield jumped to about 0.30 percent from a low of about 0.20 percent. The U.S. 10-year yield rose to 2.40 percent, its highest level since July, 2015.

"The German bond market has been under a lot of pressure this morning, and almost the complete opposite of what we saw in the last couple of days. There's been a scarcity of paper, and apparently the ECB is going to try to provide some collateral in the market through repo," said George Goncalves, head of rate strategy at Nomura, using shorthand for a repurchase agreement used to raise short-term capital. "It's early days to know what' s going to happen, but it feels very technical and I would not just attribute this to U.S. data."

Strategists also said the move in the short-term yields was not a reaction to the upcoming Italian referendum, which was driving Italian bond yields higher Wednesday.

The dollar has been rising on expectations that interest rates will rise with the Trump fiscal program and tax cuts. The dollar index hit a new high Wednesday of 101.9, its highest level since March 21, 2003, when the dollar index traded as high as 102.15

Strategists have been forecasting that the euro would move to parity with the dollar, but the bigger drama was between the dollar and the yen Wednesday.

Boris Schlossberg, managing director at BK Asset Managment, said the dollar/yen broke 111.40, a key level, and that in turn sent it to 112 and 112.50. It was at 112.90 in late morning trading.

"It's just all positive U.S data creating a huge amount of stop running in the currency market. it took out a very big level in dollar/yen," he said.