US Dollar: Upside capped as yields ease – MUFG
MUFG’s Lloyd Chan notes the US Dollar weakened after US Treasury Secretary Bessent announced a major expansion of long-dated Treasury buybacks, which pushed long-end yields lower.
The US Dollar experienced a weakening trend following an announcement by US Treasury Secretary Bessent regarding a substantial increase in long-dated Treasury buybacks, which subsequently led to a decline in long-end yields. According to MUFG's Lloyd Chan, the moderation of expectations for Federal Reserve tightening and attempts to control long-end yields are expected to cap the upside potential of the Dollar, making it more challenging to witness a sustained and sustained recovery without evidence of rising US inflation or yields.
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