US Treasury Buybacks Send Dollar Sliding Against Swiss Franc

Financial markets were caught off guard when the US Treasury Department pledged to at least double its buybacks of longer-dated government debt, aiming to curb rising bond yields.

Treasury Secretary Scott Bessent indicated that these buybacks could exceed $4 billion, a strategic move to signal that elevated yields do not accurately reflect underlying economic fundamentals.

Analysts at ING argue that the US authorities' focus on supporting the Treasury market is a 'risk-positive story', expecting low volatility and firm interest rates in carry trades.

However, the Greenback's downside may be constrained by rising safe-haven demand driven by escalating geopolitical tensions in the Middle East, which intensified after Iranian Foreign Minister Abbas Araghchi dismissed upcoming US sanctions as an act of desperation.