The benchmark 10-year yield has touched 3.09%, the highest level since May and is inching toward its seven-year high of 3.109%. Rising rates in general lead to a surge in domestic currency but the opposite is happening now as the U.S. dollar has fallen 0.6% against the basket of major currencies on Sep 20, facing a nine-week low.

WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU – Free Report) and Invesco DB US Dollar Index Bullish Fund (UUP – Free Report) plunged 0.1% and 0.7%, respectively, on Sep 20.

U.S. stock markets are in good shape as the S&P 500 index has reached a new peak, thanks to the technology, healthcare and financial sectors. The Dow-Jones Industrial Average was also at an all-time high that it had reached in January.

This may have possibly led to a change in risk appetite. The drop in greenback signaled renewed trade hopes supplemented by news that senior U.S. officials headed by Treasury Secretary Steven Mnuchin has sent invitations to their Beijing counterparts to have another round of trade talks. The greenback has so far been acting as a safe haven lately as the trade war has been steaming between America and China.

The slip in the dollar against some of the key currencies was partly caused by strong economic data coming from New Zealand and the UK.The second-quarter real GDP of New Zealand economy was reported at 2.8%, beating consensus estimates of 2.2%. Sterling gained more than 1% after renewed hopes of a Brexit deal at the summit. U.K. retail sales surpassed estimates.

The emerging market (EM) currencies, which were faltering this year, in are on recovery mode with India leading the way and China denying devaluing its currency in spite of tariff impacts. “Fears of a full-blown EM currency crisis are basically over and we’re also seeing some in the market speculating that the end of the Fed’s interest hike cycle may be coming into sight,” said Commerzbank currencies strategist Ulrich Leuchtmann.