USD finds footing as long-dated Treasury yields stabilize, though trade tensions and sanctions risks cloud the outlook.
The US Dollar is consolidating as support from stabilizing long-dated Treasury yields offsets broader downside risks. ING analysts note the bond market’s resilience, particularly at the back end, has provided a near-term lift to the greenback.
Recent moves include the Treasury’s potential use of its Fed account to fund buyback operations for long-dated debt, though this is seen as largely neutral for yields. Trade frictions, particularly between the US and China, remain a key risk, with renewed tensions likely to weigh on the Dollar.
While the balance of risks tilts downward, the baseline expectation is for USD to hold steady into the Jackson Hole symposium later this week.