Dollar Firms and UK Two-Year Yields Hit 2023 Highs as Rate-Hike Bets Grow
Per Market Talk, traders now price further hikes from the Fed and Bank of England, the dollar index hit a 19-month high, and bitcoin slid below $72,000.
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what happened
Market Talk reports that yields on two-year UK government bonds, known as gilts, climbed to their highest level since 2023, trading at 4.956% after touching 4.993% earlier in the session. Investors now fully price in three more Bank of England rate increases by July 2027, on top of the quarter-point rise delivered in November.
In the US, the DXY dollar index traded near 102.926 after reaching a 19-month high of 103.083 overnight. Convera's market insights team says markets fully price in at least a 25 basis point Fed hike on December 10 and assign about a 9% chance to a more aggressive 50 basis point move. The 10-year Treasury yield rose to 5.048%.
Bitcoin fell 3% to $71,704, its lowest level since August, according to LSEG data. Concerns about the Iran conflict and MSCI's decision to remove treasury firm Strategy from its benchmarks added pressure. Meanwhile, ING expects the Hungarian forint to stay stable, with the euro at 364.58 forints.
why it matters
Rising yields and expectations of tighter policy support the dollar and weigh on long-dated bonds and risk assets. The shift from pricing rate cuts to pricing rate hikes is a key signal for investors watching the path of yields in the months ahead.
market impact
Dollar and bonds: bets on more rate hikes support US yields and the currency; bitcoin under pressure.
- US dollar (DXY) pressure up — markets price in a Fed rate increase at the December meeting.
- Bitcoin pressure down — risk assets are weakening amid geopolitical worries and the MSCI decision on Strategy.
- UK gilts pressure down — expected further Bank of England hikes push bond prices lower.
tags
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on polymarket
sources
- Canada's LNG Ambitions Hold Promise of Big Investment, Jobs — Market Talk, 12 November 2026 at 17:27 UTC
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