Dollar Under Pressure as US Treasury Doubles Debt Repurchases
The US Dollar is coming under pressure as the US Treasury signals plans to at least double its repurchases of longer-dated debt, which could exceed $4 billion. This move has led to a decline in the USD/CHF pair, trading near 0.8000 in Asian hours on Monday.
The decision by the US Treasury is seen as an effort to rein in rising bond yields and stabilize the economy. However, this move has unsettled currency markets, causing the Dollar to soften against the Franc.
Economists expect the Swiss National Bank to keep its policy rate at 0% through 2027, but market pricing indicates a possible hike as soon as March 2027. This divergence between economists' projections and market expectations could enhance the Franc's appeal as a funding currency for carry trades.