Exchange traded funds indexed to U.S. Treasury bonds reached fresh all-time highs on Wednesday as the Dow shed more than 100 points on the worsening Eurozone debt crisis.
Yields on the 10-year note dropped to 1.65%, a new record low. Bond prices and yields move in opposite directions.
In bond ETFs, iShares Barclays 7-10 Year Treasury Bond Fund (IEF - News) and iShares Barclays 20+ Year Treasury Bond Fund (TLT - News) rallied to their highest levels ever. TLT rose 2% in early trading Wednesday. [Treasury Bond ETFs: How Much Lower Can Rates Fall?]
In currencies, the euro fell to a two-year low on concerns over Spain and the health of its banking sector. The iShares MSCI Spain (EWP - News) slid 2.5%. The single-country ETF has dropped to its lowest level since 2003.
PowerShares US Dollar Index Bullish (UUP - News) climbed to a 52-week high on Wednesday as investors moved into safe-haven currency and bond ETFs. The dollar ETF is on track for a gain of 5% in May and has only seen four losing sessions for the month. [Dollar ETF Rallies 5% in May Breakout]
iShares Barclays 20+ Year Treasury Bond Fund