Dollar Slides to Three-Month Lows as Treasury Steps In to Cool Bond Market

TLDR

• The U.S. dollar index fell to around 98.80, its lowest level since late May
• The Treasury announced it would double bond buyback operations to $4 billion per operation for longer-dated bonds
• The 30-year Treasury yield dropped from a 19-year high of 5.337% to around 5.18% following the move
• The Japanese yen pulled back from the closely watched 160 level, last trading at 158.55 per dollar
• Fed minutes from July showed policymakers remain concerned about inflation and are open to further rate hikes

The U.S. dollar dropped to its lowest point in three months on Thursday after the Treasury Department stepped in to ease pressure in the bond market.

The dollar index fell to around 98.80, its weakest level since late May. The euro climbed to $1.1674, its highest since late May.

The bond market had been under heavy selling pressure this week. Investors grew worried about rising government debt and higher oil prices tied to the ongoing U.S.-Israeli conflict with Iran.

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