Dollar falls nearly 1% for week as Treasury buybacks rattle FX
Why it matters: Investors worry bigger long-dated bond repurchases could cap yields but further weaken confidence in the US currency.
The dollar slipped Friday and was headed for a weekly loss of about 0.94% after the US Treasury’s bond-buyback plans stirred fresh concern about the currency. The dollar index was last at 98.65, near a three-month low, while the euro rose 0.21% to $1.1703 and sterling gained 0.15% to $1.3652. Treasury Secretary Scott Bessent said Thursday the department may further increase repurchases after pledging to double buybacks of longer-dated debt to rein in yields. Analysts warned that keeping a lid on long-term borrowing costs could shift pressure to the dollar. The move also set a tense backdrop for next week’s Federal Reserve Jackson Hole symposium. In Japan, the yen strengthened 0.21% to 158.72 per dollar after July core inflation accelerated, reinforcing the case for a Bank of Japan rate hike.