Dollar Slumps on Treasury's Bond Buyback Fears
The US dollar declined on Friday and was poised for a weekly loss as investors viewed the US Treasury's bond buyback efforts as only a temporary fix to the country's fiscal problems.
US Treasury Secretary Scott Bessent said he may increase government repurchases of Treasuries, which is part of a broader effort by President Donald Trump to stem rising yields and address concerns about the country's debt burden.
The dollar's decline weighed on other currencies, with the euro approaching a three-month high and sterling flirting with a six-month peak.
Currency strategist Carol Kong at Commonwealth Bank of Australia said the Treasury's actions are another example of unconventional tools being used to manage borrowing costs, which may lead investors to hedge against US dollar assets and diversify their portfolios.