Dollar Plummets as US Treasury Boosts Buybacks

The US dollar index (DXY00) dropped to a 2.5-month low on Tuesday, down by -0.76%, following the US Treasury's announcement that it will double its maximum buyback operations for longer-dated bonds.

This move is expected to boost liquidity and lower T-note yields, which have weakened the dollar's interest rate differentials.

The euro (EUR/USD) surged to a 2.5-month high, up by +0.77%, as the dollar's decline boosted the currency. However, the rally in crude oil prices is bearish for the Eurozone economy and the euro, which imports most of its energy.