Dollar Slides Amid Debt Concerns and Yield Hikes
The US dollar has been trading near multi-month lows due to growing concerns about debt and yields. The currency has been affected by the US Treasury's promise to buy back more long bonds, which has spooked traders. On Monday, the Canadian dollar slipped 0.2% in early trade, while the Australian and New Zealand dollars traded close to three-month highs.
The euro was above $1.16 at $1.1685, and the yen remained strong at 159 per dollar. Friday's data showing US services growth in August held off dollar sellers in steady trade. However, the dollar logged its largest weekly drop against Bitcoin in nearly three-and-a-half years on Sunday.
Long-end yields have been climbing globally due to solid economic growth and rising inflation expectations. The US Treasury announced it would double buybacks at the long end to $4 billion per operation last week. This interventionist signal hit the dollar, with Shane Oliver, head of investment strategy at Australian financial services firm AMP, saying 'The U.S. Treasury's attempts to artificially hold down long-term bond yields appears to be reigniting the $US debasement trade.'