U.S. Treasury’s $4 billion bond buyback announcement sparks concerns over debt management, pressuring the dollar amid rising yields.
The U.S. dollar traded near multi-month lows Monday as markets reacted to the Treasury’s plan to double long-dated bond buybacks to $4 billion per operation. The move, though small in a $32 trillion market, signaled interventionist policy, unsettling investors already wary of rising global yields and debt levels.
Yields on 30-year Treasuries recently hit near two-decade highs, driven by strong economic growth, inflation expectations, and sovereign debt concerns. The euro and sterling hovered near three- and six-month peaks, respectively, while the Canadian dollar weakened 0.5% to C$1.3836 after U.S. tariffs triggered retaliation.
The dollar’s decline extended to commodities, with gold and bitcoin benefiting from renewed pressure on the currency. Traders also awaited details on Iran sanctions and upcoming policy speeches in the U.S. and Japan.