Foreign investors bought $1778bn in US securities over the past year, offsetting trade deficits but keeping USD gains limited.
The US Dollar remains under pressure from dovish Federal Reserve repricing, limiting rebounds despite robust foreign demand for US assets. Treasury International Capital data revealed foreign investors purchased $1778bn in long-term US securities in the year to June, surpassing the $743bn trade deficit over the same period.
Foreign appetite for US equities reached a record $920bn, outpacing Treasury purchases of $294bn. Analysts dismiss concerns that USD vulnerability stems from equity corrections, citing safe-haven rotation into Treasuries during market downturns.
Rising crude oil prices and higher bond yields are adding pressure, while fragile fiscal dynamics persist. USD recovered recent losses but remains constrained by expectations of further dovish Fed adjustments.