US dollar jumps higher as Treasury yields pop. What's driving it.

<p>It's unclear what's happening in the bond market today as US 30-year yields lead the way higher, up 8.5 bps to 4.288%. The front-end is more subdued with 2s flat at 4.85%, though well-above the post-NFP low of 4.76%.</p><p>Given the dovish data today, it's tough to explain why bonds are selling off. I wonder if there are flatten trades clearing out or something else is going on around the turn of the month. Energy could also be a factor with the market worried it could keep the Fed higher for longer. Or it could be a case of 'buy the rumour, sell the fact'.</p><p>In any case, the US dollar is suddenly surging in a total reversal from the initial non-farm payrolls report.</p><p>The dollar move is right across the board with the loonie particularly hard hit despite rising oil prices. That's because Canada's economy surprisingly contracted in the Q2 GDP report.</p>

This article was written by Adam Button at www.forexlive.com.