Risk of Weaker Dollar Rises After Treasury's Buyback Move -- Market Talk

0840 GMT - The dollar looks more vulnerable to depreciation following the U.S. Treasury's decision to increase buybacks of long-term securities, MUFG Bank analysts say in a note. The U.S. is unlikely to address the ever-expanding fiscal deficit, they say. Hence, the danger is that the Treasury's buyback proves counterproductive and reduces appetite for holding U.S. assets, potentially leading to the selling of Treasury bonds and the dollar, they say. The prospect of inflation continuing to subside could also weigh on the dollar if markets price out U.S. interest rate rise expectations, they say. "There appears to now be more avenues opening for dollar weakness ahead rather than dollar strength." The DXY dollar index falls to a three-month low of 98.695. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

August 20, 2026 04:40 ET (08:40 GMT)