Dollar Struggles Near Three-Month Lows Amid Trade Friction and Sanctions Threat
The US dollar remains near three-month lows as currency traders weigh the fading impact of Washington's Treasury buyback program against fresh waves of North American trade friction and looming geopolitical sanctions.
Last week, the U.S. Department of the Treasury announced it would at least double its buyback ceiling for longer-dated Treasuries to $4 billion per operation to restore secondary market liquidity.
However, foreign exchange traders quickly looked past the technical backstop, focusing instead on the gross US debt load exceeding $40 trillion and an annual deficit near $1.8 trillion.
The dollar's traditional yield advantage has done little to revive long positions as market participants remain concerned about massive debt issuance keeping long-end yields elevated.