Dollar Falls as US Treasury Announces Expanded Bond Buybacks
The US dollar weakened against major currencies on Wednesday after the US Treasury Department announced plans to double liquidity support buyback operations for longer-dated bonds. The euro rose 0.78% against the dollar to $1.16640, hitting its highest level in more than two and a half months.
Sterling was 0.48% higher against the dollar at $1.3597, rising to its highest since May 11. Juan Perez, director of trading at Monex USA, said the announcement suggests an expansionary monetary policy and the availability of more dollars in the market, causing the US currency to depreciate.
Long-term Treasury bond yields fell sharply following the announcement, with the 30-year bond yield dropping almost 10 basis points to 5.1942%. The yield on benchmark US 10-year notes fell 4.56 basis points to 4.66%.