Dollar hits 3-month low as Treasury acts on yields

SINGAPORE: The U.S. dollar stood at three-month lows on Thursday after the Treasury Department moved to calm a bond market rout that had pushed long-end yields to their highest since 2007, sapping support for the greenback.
The dollar index, which measures the U.S. currency against six other units, was at 98.854, around its lowest level since mid-May. The euro was at $1.1674, perched at the highest level since late May.
Investors have been grappling this week with a sharp selloff in the global bond market on mounting concern about soaring government debt and the spectre of higher oil prices due to the lack of progress in ending the U.S.-Israeli war on Iran.
The 30-year Treasury yield rose to a 19-year high of 5.337% earlier this week, prompting the U.S. Treasury to unveil plans on Wednesday to double liquidity support buyback ⁠operations for longer-dated bonds.
The U.S. Treasury’s surprise bond buyback sent long-term yields lower and weakened the dollar. The move shifts more government borrowing toward short-term debt while easing pressure on longer-term bonds. Analysts said the Treasury may expand future buybacks, keeping markets focused on the impact on yields and the dollar. –Reuters