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Dollar’s upside seen capped as US long-end yields ease

A MUFG analyst said the expanded long-dated Treasury buyback plan pushed long-end yields lower, reducing the odds of a sustained Dollar rally unless inflation and yields reaccelerate.

Reported · Written up by our desk · Major Pairs

The US Dollar weakened after a major expansion of long-dated Treasury buybacks, which pushed long-end yields lower, according to commentary highlighted by FXStreet that cited MUFG analyst Lloyd Chan.

Chan argued that moderating expectations for Fed tightening and efforts to contain long-end yields are likely to cap upside for the Dollar, making a renewed, sustained Dollar rally harder to achieve without higher US inflation or higher yields.

The outlook is also being shaped by upcoming US data, with attention turning to US Jobless Claims, alongside Middle East headlines.

In FX markets, the same update noted that GBP/USD kept to its area around 1.3600 as markets assessed whether the Treasury buyback plan would be a game changer, while EUR/USD held a bullish consolidation below 1.1700 after reaching its highest level since late May.

Latest closeEUR/USD 1.157 ▲0.4%|GBP/USD 1.354 ▲0.3%

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