Dollar Index Plunges Toward 90 as Treasury Buybacks Falter

The US Dollar Index (DXY) has broken through an important support level and is heading towards levels that could signal a structural breakdown. This medium-term decline may become much larger, potentially reaching as low as 90, according to some analysts.

A decisive break of 95.55 would threaten the multi-decade rising channel in DXY, making way for EUR/USD to challenge the 1.20 level, a breakout that carries significant long-term implications.

Multiple approaches from different analytical routes are converging on the same conclusion: Treasury buybacks do not remove underlying borrowing requirements. Instead, they only manage where financing pressure appears, reshaping debt maturity rather than reducing total Treasury supply markets must absorb.

Fitch has also weighed in, affirming the US rating at AA+ with a stable outlook but highlighting enormous fiscal challenges, including rising general government debt and deficits. The median for other AA-rated sovereigns is 46.3%, compared to the projected 128% by 2030 under current policies.