SINGAPORE, Sept 26 Reuters The dollar stood by 10month highs against a basket of major currencies on Tuesday, supported by U.S. bond yields scaling 16year peaks, while the yen tiptoed deeper into the intervention danger zone.

A combination of resilient economic data, hawkish Federal Reserve rhetoric and a budget deficit to be financed by borrowing has the 10year Treasury yield up more than 45 basis points bps in September to top 4.5 for the first time since 2007.

Rates markets are priced for an almost 40 risk of another Fed hike this year, against slimmer chances for another rise in Europe, and the difference has helped prop up a dollar many had bet would swiftly fall as the Fed signalled an end to hikes.

The euro nursed Monday39;s 0.5 drop and was parked by a sixmonth low at 1.0584. It39;s on course for a 3 drop in the quarter, its worst quarterly percentage loss for a year.

Sterling is also set to snap three quarters of gains, with a loss of 3.8 over the three months to September. It fell to a sixmonth low of 1.2195 overnight and traded only a whisker above that level in the Asia session.

The U.S. dollar index touched its highest since November at 106.1 on Monday and was at 106.03 on Tuesday.

From here it eyes levels around 107.20, said analysts at Australia39;s Westpac bank. Few currencies will resist the bullish dollar macro resiliency theme and the euro and Chinese yuan look more vulnerable than most.

Last week also brought more signs that central banks…