The U.S. Dollar Index Spot slipped below 98 points for the first time in over three years on Monday, while the 10-year Treasury yields were steady around 4.35%. Experts describe this divergence as the measure of stress in markets."
What Happened: The U.S. Dollar Index slipped 1.20% to 98.211 during the publication of this article. However, its day range stood between 97.921 — 99.208 on Monday, according to the TradingView data.
Historical data shows that the dollar index last slipped below the 98 point mark to 97.79 as of March 30, 2022, closing. Whereas, the 10-year Treasury bond yielded 4.35%.
Jim Bianco, the president and founder of Bianco Research LLC., highlighted this divergence in an X post and called it a "measure of stress in markets."
"Higher rates are not supporting the dollar right now. This means they might have to go a lot higher to stop the dollar from falling," he added.
The relationship between higher yields and higher dollar value exists because the dollar value generally appreciates when foreign investors buy U.S. dollar-denominated instruments, especially the risk-free Treasury bonds. However, this divergence, as shared by Bianco in the given chart, raises concerns.
Meanwhile, economist Peter Schiff underscored that the dollar was 11% lower since President Donald Trump's inauguration day and 6% since the "so-called" Liberation Day, when the reciprocal tariffs against the U.S. trading partners were announced.
"Trump’s economic team assured us that foreigners would pay our tariffs, in part because their currencies would fall against the dollar. Instead, a collapsing dollar adds to our cost," he said.
Why It Matters: Additionally, a recent study released last week, titled ‘Dollar Upheaval: This Time is Different,' highlights that "Between April 4 and April 14, the U.S. dollar depreciated by 3.6%."
"Normally, in times of global volatility… the dollar appreciates as dollar-denominated assets benefit from a flight to safety. Not this time around," the note stated.
The dollar’s surprising depreciation indicates a divergence from typical market behavior. "If U.S. Treasuries are no longer viewed as the world’s preferred safe asset, then the status of the dollar as the world’s reserve currency may be called into question," the note stated.
Meanwhile, Chatham House expert David Lubin highlighted in another note that "policy push" from Trump's administration aims to weaken the dollar permanently against other currencies,
"Undermining the dollar’s global status would not only transmit huge amounts of additional uncertainty to the global economy, but would be a needless act of self-harm for the U.S.," cautioned Lubin.
Price Action: The dollar index was down 9.49% on a year-to-date basis. The WisdomTree Bloomberg US Dollar Bullish Fund USDU was 5.82% YTD, whereas, Invesco DB US Dollar Index Bullish Fund UUP dropped 7.99% in 2025.
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Monday. The SPY was down 1.32% to $519.46, while the QQQ declined 1.54% to $437.26, according to Benzinga Pro data.
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