USD Weakens as US 2-Year Yields Plunge to Multi-Year Lows

US 2-year Treasury yields have plummeted 10 basis points to their lowest levels since 2022, signaling aggressive Fed rate cut expectations and weakening the dollar across major pairs. The sharp decline in yields reflects growing market concerns about US growth prospects amid Trump administration tariff policies, with traders now pricing in deeper rate cuts from the Federal Reserve. The yield movement represents a dramatic shift from earlier inflation concerns to growth worries, as recent data suggests the US jobs market and economic expansion are showing signs of stress. This development has pushed USD/JPY lower by 0.8% and EUR/USD higher by 0.6% in today's session. Technical indicators point to further dollar weakness, with the DXY index breaking below the 104.50 support level. Traders should monitor upcoming US employment data closely, as disappointing figures could accelerate the current dollar selloff and prompt even more aggressive Fed easing expectations.