The rise in bond yields is benefiting the greenback, which is recovering from its two-week lows after the Federal Reserve rebuffed speculation about interest rate hikes.

10-year U.S. Treasury yields hit their highest levels in 13 months in london morning trading, exceeding 1.70% for the first time since January 24, 2020.

The Dollar Index, which measures the greenback against a basket of peers, rose as much as 0.4% to 91.671, after a two-week low of 91,300 reached after the Fed's meeting on Wednesday.
" The question remains whether the Fed can actually stop the latest surge in U.S. Treasury yields, especially considering that the improvement in U.S. fundamentals will continue ," said Valentin Marinov, head of G10 FX research at Crédit Agricole in London.

The U.S. central bank forecasts the economy to grow by 6.5 percent this year, which would be the largest annual jump in gross domestic product since 1984.