The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's policies as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

The evolving threat of tariffs has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73 percent on Wednesday, its highest since April 25. It was at 4.6628 percent on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

"While tariff talk is likely to support USD in the short term, they also introduce complexities with unknown implications."

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

US stocks ended little changed on Wednesday with investors digesting conflicting sets of jobs data and a report that President-elect Donald Trump was mulling an economic emergency declaration on inflation.

The euro eased to $1.030475, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The pound slid nearly 0.5 percent to hit $1.2303 on Thursday, its weakest since April even as British government bond yields hit multi-year highs.

While the drop in both sterling and gilt prices were much sharper in September 2022 during the turmoil that followed former Prime Minister Liz Truss' "mini-budget", sentiment remains jittery.

"The moves are related to an ongoing concern about UK borrowing levels but I don't see enough of a reason for such a rapid market move," said Kyle Chapman, FX markets analyst at Ballinger Group.

"I think that we are going to see some recovery quite quickly once the market calms."

The dollar index , which measures the US currency against six other units, stood at 109.11, just shy of the two-year high it touched last week.