USD Weakened by Yield Management Strategy
The US Dollar is experiencing weakness against all major currencies due to its yield management strategy. According to Brown Brothers Harriman's (BBH) Elias Haddad, longer-term US Treasury yields have edged lower following buyback plans. The expanded buybacks and fiscal messaging may cap long-end yields but at a credibility cost for the USD.
The upcoming US August PMI will test whether the US growth advantage can still offer near-term support to the Dollar. Treasury actions are putting pressure on the currency, as global stocks and bonds rise while crude oil prices stall. The rally in crude oil has slowed down.
Treasury Secretary Scott Bessent warned that the buyback operation could be larger than the $4 billion announced. He also stated that the White House would announce an increased focus on fiscal consolidation by the end of this week or early next week.