WASHINGTON, D.C. / RankWire.AI / – On Thursday, the U.S. dollar hovered close to a three-month minimum, as extended declines in long-term Treasury yields influenced currency movements. The dollar index was around 98.81 against six major currencies, while the euro rose to approximately $1.1676, hitting its highest point since late May. The Japanese yen also appreciated, trading near 158.45 per dollar. Investors continued to analyze new measures from the Federal Reserve alongside the latest meeting records.
The U.S. Treasury Department announced plans to boost liquidity-support buybacks for longer-dated government securities. The maximum purchase amount will increase from $2 billion to $4 billion for qualifying operations. These operations will involve nominal coupon securities with maturities ranging from 10 to 20 years and 20 to 30 years. The larger buybacks are scheduled to commence on September 9 and run through November 4, marking the conclusion of the current quarterly refunding cycle.
Following the announcement, long-term Treasury yields fell. The 30-year yield was near 5.18% on Thursday after a sharp decline in the previous session, having climbed to 5.337% earlier this week—the highest since 2007. Treasury yields are significant in global currency and bond markets because they influence returns on dollar-denominated assets. The U.S. Treasury also intends to release a revised tentative schedule for the expanded buyback operations.
Major Currencies Rise as the Dollar Weakens
The dollar’s retreat supported gains across several leading currencies during Asian trading. The British pound was around $1.3604 and remained near a three-month high. The Swiss franc strengthened to approximately 0.7999 per dollar. The euro held above $1.16, building on previous session gains. Meanwhile, the yen moved further away from the 160-per-dollar level it recently approached. The dollar index stayed below 99, close to its lowest point since May.
Minutes from the Federal Reserve’s policy meetings on July 28 and 29 revealed that policymakers remained concerned about persistent inflation. The committee maintained the federal funds target range at 3.5% to 3.75%. While nine members favored holding rates steady, three others supported a quarter-point hike. The Fed also indicated that economic activity continued to grow at a steady rate, but inflation staying above the 2% target kept price pressures central to policy considerations.
Disagreements Emerge Among Fed Officials on Interest Rate Trajectory
At the July gathering, several policymakers expressed readiness to support an interest rate hike if inflation did not trend toward the 2% goal. Many participants noted that increased rates might become necessary. The central bank kept its current approach to reserves and continued rolling over principal payments from Treasury securities at auction. The Federal Reserve’s next policy meeting is scheduled for September 15 and 16.
The recent currency movements reflected lower long-term yields and newly released U.S. policy updates. The dollar index remained near levels last observed around three months ago, while the 30-year Treasury yield stayed below the 19-year high recorded earlier in the week. The upcoming start of expanded government bond buybacks in September, coupled with the unchanged federal funds target range, continued to influence trading across foreign exchange and U.S. government debt markets on Thursday.