US Dollar declines after Treasury announces $4 billion bond buyback operations to ease long-term yields amid rising national debt.
The Euro surged to a three-month high against the US Dollar, trading above 1.1700, after the US Treasury revealed plans to expand bond buyback operations. The move aims to support liquidity for longer-dated securities, doubling the maximum size to $4 billion per operation starting September 9, up from $2 billion previously.
The announcement follows a rise in US national debt above $40 trillion, increasing investor demand for higher yields on US debt. Analysts suggest the buyback plan may reduce appetite for US assets and the Dollar, potentially capping yields but leaving the currency vulnerable.
Market focus now shifts to the Federal Reserve’s policy outlook, with the Treasury’s decision overshadowing recent Fed minutes.