U.S. dollar index reaches highest in about 10 months

NEW YORK, Sept. 26 (Xinhua) -- The U.S. dollar gained in late trading on Tuesday, as the market remained nervous for the hawkish interest rate projections from the Federal Reserve.

The benchmark U.S. Treasury 10-year yield rose a couple of basis points to near 4.57 percent early Tuesday, the highest since 2007, before it pulled back.

Higher Treasury yields lifted the U.S. dollar, with the dollar index, which measures the greenback against six major peers, was up 0.22 percent at 106.2270 in late trading, its highest in about 10 months.

President Joe Biden on Tuesday asked Congress in a social media post to fund the government as warnings grew that a looming shutdown could harm the U.S. credit rating and dollar. Moody's and Wells Fargo warned this week that a shutdown would negatively impact the U.S. economy.

Meanwhile, The Conference Board's consumer confidence index fell for a second consecutive month, dropping to 103 in September from an upwardly revised reading of 108.7 a month before.

The index is at its second-lowest level this year, landing just above May's 102.5 reading, according to data. Consumer spending serves as a critical driver for U.S. economic growth.

Minneapolis Fed President Neel Kashkari said on Tuesday that he saw a soft landing for the U.S. economy as more likely, but also a 40 percent chance that the Fed should raise rates significantly to combat inflation.

In an interview, JP Morgan Chairman Jamie Dimon said Tuesday that the worst case would be 7 percent interest rates with stagflation, "If they are going to have lower volumes and higher rates, there will be stress in the system. We urge our clients to be prepared for that kind of stress. I am not sure if the world is prepared for 7 percent."

In late New York trading, the euro decreased to 1.0566 U.S. dollars from 1.0587 dollars in the previous session, and the British pound was down to 1.2157 U.S. dollars from 1.2208 dollars.

The U.S. dollar bought 149.0710 Japanese yen, higher than 148.8090 Japanese yen of the previous session. The U.S. dollar rose to 0.9152 Swiss francs from 0.9123 Swiss francs, and it was up to 1.3521 Canadian dollars from 1.3471 Canadian dollars. The U.S. dollar fell to 11.0285 Swedish krona from 11.0561 Swedish krona.