Early on Friday, the US dollar continues to trade strong against other major currencies as US Treasury yields rise and equity markets trade bearish, boosting the safe haven appeal of the reserve currency. At the time of writing, the US dollar index DXY is trading around 91.78.

In the previous session, the dollar index gained as much as 0.5% – the highest single day increase seen since a fortnight. The strong bullish moves were triggered by the benchmark 10-year US Treasury yields rising to an over one-year high of 1.754% before easing slightly lower.

US Treasury yields were on the rise a day after the Fed signaled its intentions to extend its dovish stance and hold interest rates close to zero at least for the next couple of years, despite indicating greater optimism about economic recovery in the US. The US dollar also received support from the central bank upgrading its economic growth projections, affirming market expectations that the US economy would recover at a faster pace than several of its peers.

Meanwhile, the Euro continued to trade weak against the greenback into early trading on Friday even after some European countries agreed to resume the use of AstraZeneca’s COVID-19 vaccine. The GBP also trades weaker after the BOE cautioned about uncertainties in UK’s economic recovery.