US Dollar Falls Near Multi-Month Lows Amid Rising Debt Concerns

The US dollar traded near multi-month lows on Monday as traders remained cautious due to rising concerns about US debt. The Canadian dollar slipped by 0.2% in early trade, falling to C$1.3798 per dollar, after trade talks with the US collapsed and Washington imposed 50% tariffs on Canadian goods.

The Australian and New Zealand dollars traded close to three-month highs at $0.7171 and $0.5979 respectively. The euro was above $1.16 at $1.1685, while the yen remained strong around 159 per dollar.

Friday's data showing strong US services growth in August did little to boost the dollar, as traders were more concerned about the impact of rising bond yields on US debt. The US Treasury announced last week that it would double buybacks at the long end to $4 billion per operation, which some saw as an attempt to artificially hold down long-term bond yields.

Shane Oliver, head of investment strategy at AMP, said 'The U.S. Treasury's attempts to artificially hold down long-term bond yields appears to be reigniting the US debasement trade.'