The Ministry of Finance intervenes to curb bond market sell-off, causing the US Dollar to hit a three-month low.

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智通财经2026/08/20 07:01

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On Thursday, the US Dollar Index fluctuated at a low level, once refreshing its lowest point since mid-May at 98.74. The euro rose against the US dollar to $1.1687, the highest level since late May. Previously, the US Treasury intervened to curb the sell-off in the bond market, doubling the scale of its repurchase operations for long-term bonds, thus weakening an important support for the dollar.
This week, the bond market experienced intense selling, with the 30-year US Treasury yield once rising to 5.337%, marking a 19-year high. After the US Treasury announced its repurchase plan on Wednesday, the 30-year yield fell back to 5.184%. Analysts at TD Securities pointed out that while this move is not quantitative easing, it signals that the Treasury has made concessions to market pressure. Repurchases will begin on September 9, and details of future plans will be announced on November 4 — the day after the midterm elections — leaving room for increased repurchases.
StoneX analysts stated that the dollar has lost one of its strongest remaining pillars of support, and this year's high may already be a thing of the past. The weakening dollar has relieved some pressure on the yen; USD/JPY is currently reported at 158.45, recovering part of its overnight losses.
The minutes from last month's Federal Reserve meeting showed that policymakers' concerns about inflation have deepened further, with several officials leaning toward raising rates and "many" saying that if inflation fails to return to the 2% target, it will be necessary to increase borrowing costs. ATFX's chief market strategist noted that the next few trading days will show the market's view of the Treasury's move, and the market may attempt to test the credibility of this measure.

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The US dollar fell to a three-month low against a basket of currencies. ING strategist Chris Turner stated in a report that the US Treasury's decision to increase the scale of long-term bond buybacks has boosted market risk sentiment. He noted that this move shows Treasury Secretary Janet Yellen's willingness to step in to curb the rise in long-term borrowing costs. This has reduced one of the main threats facing risk assets this summer, undermined the dollar’s status as a safe-haven asset, and

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