The dollar fell to a three-month low as rising bond yields in Europe sapped demand for U.S. assets, creating a selloff Goldman Sachs Group Inc. compared to the “taper tantrum” the former Federal Reserve chairman initiated in 2013. Janet Yellen, the current Fed chair, added to the woes by saying long-term interest rates could jump when the central bank raises its benchmark rate, sending U.S. stocks and bonds lower.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, fell 0.7 percent to 1,160.75 at 5 p.m. in New York, the lowest on a closing basis since Feb. 5. The index slid 3 percent in April.

The dollar weakened 1.4 percent to $1.1347 per euro and declined 0.3 percent to 119.46 yen.

“Long-term interest rates are at very low levels,” Yellen said in response to a question after a speech in Washington Wednesday. “We could see a sharp jump in long-term rates” after liftoff. Most Fed officials predict they will raise rates this year for the first time since 2006.

Source : Bloomberg