The U.S. dollar index traded at a more-than one-week highs on Thursday as Treasury yields traded near multiyear highs, after minutes from the Federal Reserves September meeting showed that Fed policy makers are largely united on the need to raise borrowing costs further.
That came despite U.S. President Donald Trump's view that interest rate hikes have already gone too far. Benchmark 10-year Treasury yields jumped to 3.21 percent, before slipping. The two-year note yield rose to its highest level in more than a decade, breaking above 2.9 percent.
The Treasury market leaked higher in yield yesterday following the FOMC minutes, and that got a bit of attention, said Brian Daingerfield, a macro strategist at NatWest Markets in Stamford, Connecticut.
"For the broader dollar, the interplay is how does the dollar trade relative to whats going on interest rates and whats going on in the broader risk environment? Daingerfield said.
The dollar index measuring the greenback against a basket of currencies gained 0.38 percent on the day to 95.94, around its highest level since Oct. 9.
China's currency traded near a three-month low against the dollar at 6.9490 yuan per dollar, after a semiannual report by the U.S. Treasury refrained from naming China a currency manipulator but showed concern about yuan depreciation.
"Of particular concern are China's lack of currency transparency and the recent weakness in its currency," said Treasury Secretary Steven Mnuchin.
The yuan's moves over the coming six months, the U.S. explicitly noted that it stands ready to name China in its April 2019 report, Citigroup analyst Calvin Tse said in a report.
Deutsche Bank strategists termed the Treasury report "as a bit of an escalation without being too dramatic."