Dollar Sinks to Three-Month Lows as Treasury Intervenes in Bond Market Rout

The US dollar hit three-month lows on August 20 as the Treasury Department moved to calm a bond market rout that had driven long-end yields to their highest since 2007, eroding support for the greenback.

The dollar index stood at 98.854, its lowest level since mid-May, while the euro reached $1.1674, its highest level since late May.

Investors were grappling with a sharp selloff in the global bond market due to concerns about soaring government debt and higher oil prices resulting from the ongoing US-Israeli conflict on Iran.

The 30-year Treasury yield rose to a 19-year high of 5.337% earlier this week, prompting the Treasury to unveil plans to double liquidity support buyback operations for longer-dated bonds.