Dollar Falls to Three-Month Low Amid Treasury Buyback Concerns

The US dollar has fallen to a three-month low against the euro due to concerns over the impact of the Treasury's plan to expand buybacks of longer-dated government debt.

Treasury Secretary Scott Bessent hinted at increasing repurchases even further, after the department surprised markets by pledging to double the size of its buybacks of longer-dated debt in an effort to rein in bond yields.

The 30-year yield reached its highest level since 2007 due to concerns over the deteriorating fiscal outlook, heavy issuance, geopolitical risk stemming from the war with Iran, and uncertainty over the Federal Reserve's policy path.

Analysts say that holding yields down will simply shift the burden of fiscal concerns onto the currency, and so far the strategy hasn't achieved its primary goal as yields have crept back higher.