Early on Friday, the US dollar is trading bearish, holding near the lowest levels seen since a week, on the back of easing in US Treasury yields even as the market sentiment turns upbeat, sending investors towards trading riskier instruments. At the time of writing, the US dollar index DXY is trading around 91.92.

The improvement in risk appetite among traders not only dented the safe haven appeal of the greenback but also sent US equities to record highs while commodity currencies like the AUD and NZD to the highest levels seen in a week. So far this week, the US dollar index has lost around 0.6% of its value, after touching the highest level seen in over three months earlier this week.

The dollar has experienced considerable volatility in recent sessions as US Treasury yields surged to one-year highs. The benchmark 10-year US Treasury yields rose from under 1% to more than 1.6% by late last week, before easing lower to around 1.5% this week, bringing the US dollar down with it.

Additional bearishness in the greenback was driven by a weaker than expected CPI report which released during the mid of this week. The risk sentiment in global markets was also boosted by the latest unemployment claims figures showing an improvement in the US labor market even as the next round of fiscal stimulus gets ready to be rolled out, which can help speed up economic recovery in the US.