Dollar Index Ticks Higher Ahead of PCE Data as Buybacks Shift

The US Dollar Index (DXY) has been trading near 99.00 in early European hours on Wednesday, showing signs of recovery ahead of the July PCE Price Index release later in the day.

Policy action and rate expectations have been shifting as Treasury Secretary Scott Bessent announced that bond buybacks would be lifted to at least $4 billion per operation from a $2 billion maximum. This move comes amid growing concerns about the national debt, which has surpassed $40 trillion.

The market now implies a 38.4% chance of a 25 bps rise in September, down from 67% earlier this month, based on the CME FedWatch tool.