Dollar trading near multi-month lows, restrained by debt nerves

Singapore - The US dollar found itself near multi-month lows on Monday, unsettled by the Treasury's promise to buy back more long bonds and anticipation of sanctions on Iran and policy speeches from the US and Japan. The Canadian dollar dipped 0.2% to CUS$1.3798 per dollar after the collapse of trade talks with the US and the imposition of 50% tariffs on Canadian goods.

The Australian and New Zealand dollars were just below three-month highs. The euro was above US$1.16 at US$1.1685, while the yen hovered around 159 per dollar. Friday's data showed the strongest US services growth in nearly two years in August, holding back dollar sellers. The dollar recorded its largest weekly drop against bitcoin in nearly three-and-a-half years.

Long-end yields have risen globally due to strong economic growth, rising inflation expectations, and concerns about sovereign debts ballooning. The US Treasury's intervention to hold down long-term bond yields raised concerns about dollar devaluation. US Treasury Secretary Scott Bessent will hold a press conference on Monday, and Federal Reserve Chairman Kevin Warsh will speak in Jackson Hole on Friday.

The Bank of Japan's deputy governor Ryozo Himino will also provide insights ahead of the central bank's policy meeting next month.