US Dollar: Treasury twist signals structural risks – Commerzbank
Commerzbank’s Volkmar Baur notes the US Dollar remains under pressure as EUR/USD trades around 1.17 following the US Treasury’s expansion of its Liquidity Support Buyback Operations.
The US dollar continues to face downward pressure as the US Treasury expands its Liquidity Support Buyback Operations, according to Commerzbank's Volkmar Baur. This move is reminiscent of Operation Twist, executed in 2011-2012 when the Federal Reserve swapped short-term bonds for long-term bonds to lower long-term interest rates.
The Treasury's current actions suggest a willingness to tolerate a weaker dollar to keep interest rates low, indicating a structural risk for the US dollar. While the impact on long-term yields is expected to be modest, the decision highlights the Treasury's preference for a weaker US dollar over higher interest rates.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- Dollar wobbles as investors balk at US Treasury’s rescue efforts businesstimes.com.sg
- Dollar wobbles as investors balk at US Treasury's rescue efforts brecorder.com
- Dollar wobbles as investors balk at US Treasury’s rescue efforts freemalaysiatoday.com
- Dollar wobbles as investors balk at US Treasury's rescue efforts nst.com.my
- Dollar wobbles as Treasury's bond-market buybacks raise fresh concerns channelnewsasia.com
- Asia FX set for weekly gains, dollar near 3-mth lows despite U.S. Treasury move investing.com
- Gold prices steady as dollar weakens, US Treasury acts to curb yields english.ajel.sa
