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U.S. dollar holds near multi-month lows as debt worries spur caution
Reuters reported the Treasury is doubling long-end bond buybacks to $4 billion per operation, a signal traders said spooked the dollar as long-end yields climbed globally.
The U.S. dollar hovered near multi-month lows on Monday as investors were unsettled by the U.S. Treasury’s plan to buy back more long-dated bonds, while they awaited details on potential new sanctions on Iran and upcoming policy speeches in the United States and Japan, according to Reuters. Long-end yields have been rising globally, supported by a solid growth outlook and rising inflation expectations, while concerns over ballooning sovereign debt added pressure. Reuters said the U.S. Treasury’s announcement last week that it would double long-end buybacks to $4 billion per operation came after 30-year yields neared almost two-decade highs. The dollar’s broader slide has also weighed on some other assets, with Reuters noting it posted its largest weekly drop against bitcoin in nearly 3.5 years and has been sliding sharply versus gold as fears resurfaced that the currency could be hurt if the U.S. tries to hold down yields. In currency trading, Reuters reported the euro was at $1.1665 and sterling at $1.3628, both soft on the day but near recent highs. Reuters added that the Japanese yen was slightly weaker at 159.25 per dollar, while the Canadian dollar slid 0.5% to C$1.3836 after Washington imposed 50% tariffs on Canadian goods and Canada retaliated. The market focus also includes whether U.S. actions tied to Iran will spill over to China, with China’s yuan hovering near a 3.5-year high at 6.7236 onshore yuan per dollar.
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