Dollar Slumps to Three-Month Low Amid Treasury Buyback Pressure
The US dollar has dropped to its lowest level in three months due to the Federal Reserve's ongoing Treasury buyback program. The program, aimed at normalizing the central bank's balance sheet, is increasing demand for longer-dated government bonds and pushing yields down.
As a result, investors are shifting capital toward higher-yielding currencies, reducing the appeal of dollar-denominated assets. The 10-year Treasury yield has slipped to 4.1%, down from 4.3% a week earlier.
The Fed's latest policy statement highlighted persistent inflation risks that could influence future rate decisions. Policymakers remain concerned about inflation running above the central bank's 2% target, citing supply chain disruptions and robust consumer spending as contributing factors.