Dollar Rebounds as Treasury Yields Rise Amidst Bond Buyback Boost
The US dollar index has made an attempt to rebound after a strong sell-off triggered by Treasury's decision to boost buybacks of long-dated bonds.
According to data, the U.S. Treasury Secretary Scott Bessent indicated that Treasury could increase buybacks to more than $4 billion per issue, which is contributing to the dollar's recovery.
The Initial Jobless Claims report showed 206,000 Americans filed for unemployment benefits in a week, compared to an analyst forecast of 210,000. This data has also positively impacted the US dollar index.
Despite this rebound, some analysts warn that rising Treasury yields could pose a challenge to the dollar's growth. The yield of 2-year Treasuries climbed towards the 4.20% level, while the yield of 10-year Treasuries settled above 4.70%. This has led to a surge in USD/JPY.
The EUR/USD is mostly flat as traders take some profits off the table and react to Germany's PPI report, which showed a +3% year-over-year increase compared to an analyst forecast of +2.7%.