DXY Falls to Over 2-Month Low

2026-08-19 18:27 By Agna Gabriel 1 min. read

The US dollar index fell below 99 on Wednesday, the lowest since late May, after the US Treasury announced it would double its long-term buyback program.

The move signaled that the US Treasury would be willing to actively intervene on the bond market to cap long-term yields, raising the outlook of dollar liquidity in the global financial system from the Treasury General Account.

Such measures were in line with earlier efforts to limit the surge in long-dated bonds globally, which often drive foreign companies to sell their dollar holdings to support their currency.

Japan and the US had recently intervened in foreign exchange markets, driving the dollar index to plunge, and Treasury Secretary Bessent called for higher limits to the Federal Reserve's FIMA facility for foreign countries to have dollar liquidity without having to actively intervene in foreign exchange markets.

Meanwhile, FOMC minutes confirmed that some members see the case for higher rates.



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