Dollar Index Plummeting After Treasury Notice Sparks Market Mayhem
The US Dollar Index (DXY) plummeted on Wednesday, closing at its weakest level since mid-May after a Treasury notice on government bond buybacks sent shockwaves through the market.
According to the document, the debt manager will increase the size of liquidity support buyback operations in longer-dated nominal coupons from 2 billion Dollars to at least 4 billion across the 10-to-20-year and 20-to-30-year sectors. This change took effect on September 9 and will continue through November 4.
The announcement had a devastating impact on the DXY, causing it to fall 0.86% against every major currency, including the Swiss Franc, which gained nearly 1.8%, and the Mexican Peso, which reached a two-year high.
Gold prices also surged to near $4,500 an ounce, while Silver followed suit, as investors sought safe-haven assets amid the market turmoil.