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Dollar weakens as longer-term US yields slip after buyback plans
Brown Brothers Harriman said buyback efforts could cap long-end yields, but the move risks weighing on the dollar’s credibility, ahead of the August PMI.
The US dollar is weaker against all major currencies, Brown Brothers Harriman analyst Elias Haddad said, as longer-term US Treasury yields edge lower after announced buyback plans.
Haddad noted that longer-dated yields moved modestly below levels seen after Wednesday’s buyback announcement, with the Treasury’s intervention helping to cap long-end yields even as crude oil prices stalled during the session.
The backdrop includes comments from US Treasury Secretary Scott Bessent, who warned the buyback operation could be larger than the $4 billion previously announced and said the Treasury has a “big toolkit” to support the market, while the White House plans to highlight increased focus on fiscal consolidation soon.
Still, the analysis said the CBO projects historically large budget deficits and debt rising to a record 120% of GDP by 2036, and that credibility concerns could translate into a weaker dollar. FXStreet also flagged the upcoming US August PMI as a near-term test of whether the US growth advantage can keep supporting the currency.
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