The US dollar is showing signs of strength against other major currencies as markets turn hopeful of the US economy recovering at a more rapid pace than its peers, even as US bond yields continue to climb higher. At the time of writing, the US dollar index DXY is trading around 91.34.

During the previous session, the dollar index soared to the highest level seen in three weeks and could even cross 91.60 – the highest value it had touched through February. Meanwhile, the Euro has weakened to a near two-week low as ECB officials turned more cautious about the recent strengthening in government bond yields.

While the ECB President Christine Lagarde and policymaker Francois Villeroy de Galhau expressed concern and suggested possible action against it, the US Federal Reserve, on the other hand, have played down any possible cause for concern due to the uptick in bond yields.

The US dollar has also been strengthened by the possibility of more fiscal stimulus driving faster recovery in the US economy even as the COVID-19 vaccine distribution spreads around the country. Additional bullishness was also driven by the manufacturing activity across US soaring to a three-year high during February, supporting expectations for rapid economic recovery.