Dollar Sells Off Amid US Fiscal Concerns

The US dollar plummeted to a three-month low against the euro on August 20 before partially recovering after the Treasury Department announced plans to calm bond market jitters.

The Treasury said it would double its buybacks of 10- to 30-year debt to at least $4 billion per operation, in an attempt to steady the market.

This move sparked a sharp sell-off in the US currency as traders worried about a worsening fiscal picture and potentially higher inflation.

The announcement also boosted gold and Bitcoin, which saw a surge in value as some investors referred to it as the 'debasement trade'. The US dollar index fell 0.01 per cent to 98.82, while the euro reached its highest level since May 14 at $1.171.