Report published May 20, 2026

FX Daily: More Bond Fuel for the Dollar Rally - ING Analysis

ING · May 20, 2026

The US dollar is strengthening as rising real yields and inflation concerns drive a bond market sell-off, while downside surprises in UK inflation reduce the likelihood of aggressive BoE hikes.

Read the full report

Read the remaining 3 pages

View Report Sign in

Finvaulta summarizes ING's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.The ongoing US bond market sell-off and rising real yields are providing strong support for the US dollar.
2.UK inflation surprised to the downside at 2.8% YoY, making a June Bank of England rate hike a 'close call' (50/50 probability).
3.Global risk-off sentiment and Middle East tensions are driving the USD safe-haven appeal to its highest levels since late 2022.

USD: Bond sell-off keeps offering support
EUR: Downside risks remain
GBP: Lower-than-expected inflation makes BoE hike a close call
CEE: Weighed down by negative sentiment
Author

Report data

The ongoing bond market sell-off is offering ideal conditions for a dollar strengthening

Metric	Estimate	Context
UK April Inflation	2.8%	Downside surprise compared to expectations.
Brent Crude Price	110 USD/barrel	Trading levels this morning.
EIA Crude Inventory Consensus	2.8 million barrels	Consensus expectation for today's release.
Two-year EUR:USD Swap Spread	-100 bp	Widened back from a peak of -65bp in early April.