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USD weakens after U.S. Treasury doubles long-term bond buybacks
Gold and Bitcoin rallied after the Treasury announcement, while USD/JPY fell midweek as the dollar weakened.
Gold and Bitcoin surged after the U.S. Treasury said it would double the size of its long-term bond buybacks from $2 billion to at least $4 billion per operation, a move that pushed bond prices higher and weakened the U.S. dollar, Action Forex reported.
The outlet noted that the broader market backdrop stayed cautious, with major U.S. and Japanese stock indexes closing lower as investors weighed high bond yields, U.S.-Iran tensions, and weakness in parts of the technology sector.
In FX, USD/JPY moved higher early in the week as WTI crude oil rose, but the surprise increase in U.S. government bond purchases weakened the dollar midweek and drove the pair lower for the week, Action Forex said.
Traders also pointed to upcoming catalysts including important U.S. data and the possibility of a Bank of Japan interest rate hike next month, with USD/JPY expected to trade sideways to lower ahead of the midweek release.
Latest closeGold $4,432.00 ▲1.6%|WTI crude $82.40 ▲1.4%|Bitcoin $77,029.57 ▼0.1%