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Dollar Index holds near 99 as Treasury funding boosts reserves

A move in the Treasury General Account toward about $950 billion is cited as a driver of dollar liquidity, even as the 10-year yield fell below 4.8%.

Reported · Written up by our desk · Major Pairs

FXStreet links recent Dollar Index trading near 99.00, where the dollar is up about 0.15%, to shifts in US Treasury funding operations rather than changes from the Federal Reserve.

The outlet says the key technical reference is the index losing a 200-day EMA during August 19 and 20, after the Treasury moved to double the ceiling on long-end bond buybacks, and that it has not regained that level since.

FXStreet also points to the Treasury General Account, the government balance at the Fed, which it says stands near $950 billion versus a prior working level of roughly $550 billion to $600 billion. It argues that when money leaves the account it arrives as bank reserves, and with the overnight reverse repo facility drained, there is little near-term capacity to absorb the flow.

The piece adds that Treasury buying can affect yields and duration, noting that on the session cited the 10-year yield fell more than 3 basis points to about 4.70% and the 30-year dropped more than 4 basis points to around 5.23%, while the Dollar Index still gained, suggesting the move reflects bond purchase dynamics rather than a pure rate-differential story.

Latest closeDollar index 99.64 ▼0.3%

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