Dollar Hits Multi-Month Lows Amid Rising Debt and Interest Rates
The US dollar has hit a multi-month low, trading at levels not seen since mid-May. The dollar index (DXY) hovered around 98.8 in late August 2026, marking its weakest point this year.
The decline is largely due to the US Treasury's efforts to temper rising long-term interest rates. In response to soaring 30-year Treasury yields, which recently touched 5.337%, a rate not seen in the past 19 years, the Treasury announced plans to double its bond buyback operations to a minimum of $4 billion each.
Analysts warn that this move may only provide temporary relief, as it could shift the issue from debt to currency values, exacerbating the dollar's woes. The US national debt has ballooned beyond $40 trillion, with an anticipated fiscal deficit surpassing $2 trillion for the year.