US Dollar Hits Three-Month Low as Treasury Buyback Concerns Mount
The US dollar slipped to a three-month low against the euro after the Treasury signalled plans to expand buybacks of longer-term government debt. Investors worry the move may fail to contain rising bond yields while putting further pressure on the currency. Long-term US borrowing costs have climbed amid concerns about fiscal conditions, heavy debt issuance, the Iran war and uncertainty over the Federal Reserve’s next policy move. The 30-year Treasury yield recently reached its highest level since 2007. The euro and pound gained against the dollar, while Bitcoin rose sharply. Attention is now on Federal Reserve Chairman Kevin Warsh’s upcoming Jackson Hole speech, which could influence expectations for interest rates and the dollar’s direction. The Japanese yen also strengthened after Japan reported faster core inflation, raising expectations that the Bank of Japan could increase interest rates.
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