Dollar Hits Multi-Month Lows Amid Trade Tensions and Bond Buyback Fears

The US dollar has been experiencing a decline in recent weeks, hitting multi-month lows. The currency's value slipped further after the collapse of US-Canada trade talks and Washington's imposition of 50% tariffs on Canadian goods, prompting Ottawa to retaliate.

Although strong services data for August helped limit dollar selling, the currency recorded its sharpest weekly decline against Bitcoin in nearly three and a half years. It also fell sharply against gold amid renewed concerns over attempts to suppress US yields.

The Treasury's decision to double long-end buybacks to $4 billion per operation has unsettled traders and weighed on the dollar. AMP investment strategist Shane Oliver said this move is reviving expectations of further US dollar depreciation.