US Dollar broadly consolidates as analysts cast doubts over long-term impact of US Treasury buyback
The US Dollar Index (DXY) is broadly consolidating near the 99.00 level as investors process the US Treasury's expanded long-end bond buyback and a modest rebound in Treasury yields.
The US Dollar Index (DXY) remains stable around the 99.00 level as investors assess the US Treasury's increased long-end bond buyback and a slight recovery in Treasury yields. Long-term borrowing costs have cooled initially, but experts are uncertain whether this policy shift signals a long-term trend or a short-term fix leaving the US Dollar vulnerable to further gains if inflation expectations rise.
ING analysts view the Treasury's buyback as a proactive move to safeguard the long end of the yield curve, potentially resulting in a gradual US Dollar depreciation and increased performance in high-beta commodity and emerging market currencies. Conversely, DBS Group Research maintains a more cautious stance, emphasizing that fiscal budget control by Congress means that administrative buybacks cannot alter the budget's deficit path.
They also highlight potential inflation risks from geopolitical tensions that could boost yields and strengthen the US Dollar. Immediate market expectations predict that the DXY will hover around the 99.00 range, while longer-term projections may vary depending on fiscal reforms and geopolitical developments.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
