The US dollar soared to close out the trading week as investors sought shelter in the conventional safe-haven asset. The greenback has been building on its gains recorded earlier in the year as geopolitical tensions and inflation fears have bolstered the international reserve currency.

The US Dollar Index (DXY), a gauge of the buck against a basket of currencies, surged 0.67% to 105.99, from an opening of 105.28, at 13:34 GMT on Friday on the New York Mercantile Exchange. The DXY is poised for a weekly gain of 1.6%, adding to its year-to-date rally of 4.6%.

Financial markets are combing through the latest trade data that supports and justifies the latest inflation worries.

In March, import prices rose 0.4%, up from 0.3% in February. This also surpassed the consensus estimate of 0.3%. On a year-over-year basis, import prices climbed to 0.4%, up from -0.9% in the previous.

Export prices jumped 0.3%, down from 0.7% in the previous month. The market estimate was flat at 0.3%. Export prices rose to -1.4% year-over-year, up from the downwardly revised -2%.

This comes as the March consumer price index (CPI) and the producer price index (PPI) reports suggested a reacceleration of inflation.

The wave of inflation figures has the financial markets trimming their monetary policy expectations. The Federal Reserve is now expected to cut interest rates two times this year, beginning in September, according to the CME FedWatch Tool.

In other words, the US central bank could keep interest rates higher for longer, which would be bullish for the US dollar and Treasury yields.

Heading into the Friday close, Treasury yields had been popping, but they experienced a pullback to finish the trading week. The benchmark ten-year yield tumbled 8.9 basis points to 4.487%. The two-year yield fell below 4.87%, while the 30-year bond declined underneath 4.6%.

In other data, the University of Michigan’s Consumer Sentiment Index fell to 77.9 in April, down from 79.4 in March and below economists’ expectations of 79. One- and five-year inflation expectations rose to 3.1% and 3%, respectively.

The next major US economic report will be March retail sales figures.

The USD/CAD currency pair advanced 0.61% to 1.3773, from an opening of 1.3690. The EUR/USD declined 0.76% to 1.0646, from an opening of 1.0728.