Government borrowing costs rise as oil heads back to the 80s

The dollar took a breather at a five-month high on Thursday, though government borrowing costs continued to grind upwards as oil prices hit their highest since 2014 at almost $80 a barrel. Ten-year U.S. government Treasury yields, which are a key driver of global borrowing costs, neared a 7-year high of 3.12 percent as higher oil pointed to higher inflation and followed Wednesday's upbeat U.S. retail sales numbers. "The big turnaround was the Japanese yen, there is clearly big time (U.S. vs Japan) rate sensitivity there," said Saxo Bank's head of FX strategy John Hardy.