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Dollar index heads toward 95.55 as EUR/USD looks to 1.20

The push follows a Treasury plan to lift longer-dated nominal debt buybacks, with 10 to 20 year and 20 to 30 year operations increased to at least $4bn per sector and a rise in scrutiny after the 30-year yield hit 5.34% in August.

Reported · Written up by our desk · Major Pairs

The dollar index faces a critical technical test as traders weigh whether the greenback’s selloff is only a correction or the start of a deeper repricing, with attention on a decisive break of 95.55, Action Forex said. A move through that level would threaten a multi-decade rising channel, potentially opening the door to the 90 area, while EUR/USD is positioned to challenge 1.20 for long-term implications.

Action Forex pointed to converging views from several angles, including how Treasury financing mechanics could influence liquidity and whether buybacks can meaningfully change borrowing requirements. The outlet said that while buybacks can manage where financing pressure appears, they do not remove the underlying requirement to fund deficits.

The renewed focus comes after the Treasury announced on August 19 that it would increase buybacks in longer-dated nominal debt, raising maximum operations in the 10 to 20 year and 20 to 30 year sectors from $2bn to at least $4bn, with larger operations scheduled between September 9 and November 4. The plan followed a period when the 30-year Treasury yield briefly reached 5.34%, Action Forex said.

Treasury Secretary Scott Bessent later said buybacks could exceed $4bn per issue and described liquidity in 30-year bonds as “very poor,” aiming to improve market functioning and steer investors toward fundamentals rather than headline volatility. Action Forex noted that long yields fell sharply after the announcement, but relief faded as the ten-year yield reversed higher and recovered a meaningful portion of the earlier decline, leaving the dollar weaker even after yields rebounded.

Latest closeEUR/USD 1.157 ▲0.4%|Dollar index 99.64 ▼0.3%

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