US Treasury doubles long-end bond buybacks to $4 billion per operation, weighing on USD as traders eye Fed signals and Iran sanctions.
The EUR/USD pair traded near 1.1680 in early European trading, supported by US Treasury’s announcement to double long-end bond buybacks to $4 billion per operation. The move aims to curb surging 30-year yields but raises concerns over fiscal sustainability and Fed policy uncertainty, pressuring the USD.
Traders are also monitoring US Treasury Secretary Scott Bessent’s press conference at 18:00 GMT, where he may outline sanctions on Iran and potential measures against China. Iran dismissed the threats as ineffective, but geopolitical tensions could drive safe-haven flows back into the USD. Friday’s speech by Fed Chair Kevin Warsh at Jackson Hole will further shape rate expectations.
Market focus remains on whether Fed officials will signal a hawkish shift, which could reverse recent USD weakness. The bond buyback program’s expansion follows last week’s pledge to at least double longer-dated debt purchases.