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US dollar news
Archived — this story has rotated out of today’s deck. It is kept here in full.
The gist
US dollar fell 0.8% after Treasury doubled bond buybacks, pushing 30-year yield down 10bp. Lower yields reduce dollar appeal, pressuring the greenback and boosting gold.
Background
The US dollar weakened sharply after the US Treasury announced it was increasing its buyback operations for longer-dated bonds, which pushed long-term yields lower. Lower yields reduce the relative appeal of US assets to global investors, removing support for the greenback. This move came amid concerns about US fiscal health and softer economic data, which have led investors to reassess expectations for Federal Reserve rate hikes.
How it unfolded
- Wed, 19 Aug 2026US Treasury announces it is increasing, by at least double, the size of liquidity support buyback operations for longer-dated nominal coupon securities. The dollar falls 0.8%, its worst day in three weeks, and the 30-year yield drops 10bp.
- Fri, 21 Aug 2026The dollar is set for a weekly loss as investors view the Treasury's bond buyback as a temporary fix and worry about the interventionist approach. The dollar index slips below 99.00.
- Sat, 22 Aug 2026Gold and silver extend their breakout as the US dollar slides below 99. Spot gold trades near $4,594.60, up 1.69%.
Who’s saying what
- Analysts
- Some analysts warn that the Treasury's buyback operation could encourage more dollar hedging and diversification, adding headwinds to investor sentiment.
- Bears
- BCA Research recommends selling the US dollar against the won, yen, Taiwan dollar, Singapore dollar and euro, citing declining real interest rates and weakening foreign inflows.
- Bulls
- Societe Generale notes the US economy had shown resilience since the start of the Middle East conflict, with Fed rate pricing underpinning the dollar.