Treasury’s Expanded Debt Buybacks Push Dollar Near Three-Month Lows

The U.S. Treasury announced on Wednesday that it will double the size of its buyback operations for 10- to 30-year Treasury securities, raising the per-operation cap to at least $4 billion. The move, intended to steady a bond market that had driven long-end yields to their highest levels since 2007, triggered a sharp sell-off in the U.S. dollar. By Thursday the dollar index was hovering at 98.93, with the euro briefly climbing to $1.1685–95 and the yen strengthening to 159.13 per dollar.

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Long-term Treasury yields had surged amid concerns over the growing U.S. fiscal deficit and doubts about the Federal Reserve’s policy credibility. Earlier in August the Treasury had issued its quarterly refunding statement, and a 20-year bond auction was scheduled for the following week. The expanded buyback program follows a prior intervention on July 31, when Treasury Secretary Scott Bessent coordinated with Japan to counter a sharp yen slide.

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• Dollar index: 98.93 (up 0.1%).

Euro slips below 1.1700 as US Dollar rebounds on rising Treasury yields

• Euro/USD: 1.1685–95 (up $0.0025 from the previous day); peaked near $1.171, the highest since May 14.

Euro hits roughly three-month high against dollar as falling U.S. long-term yields accelerate dollar selling — BigGo Finance

• Yen/USD: 159.13 (up 0.6%).

Euro hits roughly three-month high against dollar as falling U.S. long-term yields accelerate dollar selling — BigGo Finance

• Buyback cap: increased from at least $2 billion to $4 billion per operation.

Euro hits roughly three-month high against dollar as falling U.S. long-term yields accelerate dollar selling — BigGo Finance

• Market-priced probability of a September Fed rate hike: 35%; rises to nearly 67 % by December.

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• Sterling: 0.1 % stronger at $1.3622, reaching $1.3659, the highest since February 16.

Euro hits roughly three-month high against dollar as falling U.S. long-term yields accelerate dollar selling — BigGo Finance

The Treasury framed the expanded purchases as “liquidity support” for Treasury securities with maturities beyond ten years, aiming to lower long-term yields and ease pressure on the bond market. Federal Reserve Chairman Kevin Warsh is slated to speak at the Jackson Hole symposium next week, where investors will look for guidance on how the Fed intends to address still-elevated inflation. Minutes from the July Fed meeting, released Wednesday, showed heightened concern about inflation and indicated that several policymakers were prepared to raise rates further if price pressures persisted.

CNBCEuro slips below 1.1700 as US Dollar rebounds on rising Treasury yields Euro hits roughly three-month high against dollar as falling U.S. long-term yields accelerate dollar selling — BigGo Finance

While some sources reported the euro climbing to its three-month high of $1.171 (the level last seen on May 14), other outlets noted the pair slipping below 1.1700 later in the session, with the price around 1.1695. The divergence reflects rapid shifts in investor sentiment as Treasury yields rose and the dollar regained strength. No source provided a definitive explanation for the intra-day reversal, leaving a gap in understanding the precise drivers of the euro’s volatility.

Euro hits roughly three-month high against dollar as falling U.S. long-term yields accelerate dollar selling — BigGo Finance

Traders will watch Chairman Warsh’s Jackson Hole remarks for clues on future monetary policy, while the Treasury’s expanded buybacks remain in effect ahead of the upcoming 20-year auction. Market pricing suggests a growing likelihood of a Fed rate hike before year-end, a factor that could further influence the dollar’s trajectory against major currencies.

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