Home›Forex›Major Pairs›Dollar weakens as Treasury expands long-dated buybacks

Dollar weakens as Treasury expands long-dated buybacks

The US Dollar Index fell to 98.86, while the 10-year yield slid to about 4.64% and the 30-year yield dropped to 5.19% after the buyback expansion.

Reported · Written up by our desk · Major Pairs

FXStreet reports the US Dollar Index, which tracks the greenback against a basket of six major currencies, came under renewed selling pressure on Wednesday after the US Treasury expanded its liquidity-support buyback operations for longer-dated securities.

The Treasury said it would at least double the maximum size of its buybacks for government securities, raising purchases in the 10-to-20-year and 20-to-30-year maturity buckets from $2 billion to at least $4 billion per operation.

Following the announcement, long-dated Treasury bonds rose and yields fell sharply. The 10-year benchmark yield was around 4.64%, down more than 5 basis points, and the 30-year yield was near 5.19%, down nearly 9 basis points after climbing above 5.30% on Tuesday for the first time since 2007.

FXStreet also noted that while falling Treasury yields tend to reduce the relative appeal of US assets and add pressure to the dollar, uncertainty remains around the Federal Reserve’s policy path. Traders are set to watch the minutes from the FOMC’s July meeting, due at 18:00 GMT, amid competing signals including weak US data and an energy shock that clouds the inflation outlook.

Latest closeDollar index 99.64 ▼0.3%

More like this

Sources