Dollar Downside Possible as Treasury Intervenes and Yields Fall

The US Treasury's recent buy-back operations and a drop in longer-dated yields have supported equities and weighed on the Dollar, according to ING's Chris Turner.

These actions have led to a softer DXY, breaking below its recent range with scope for further downside.

The July FOMC minutes were not particularly hawkish, leaving the US Dollar in a flat-to-lower profile.

The 10bp drop in longer-dated US yields has lifted equities and seen the dollar soften, especially against high-beta currencies such as the Norwegian krone, New Zealand dollar, and Swedish krona.