WASHINGTON, D.C. / RankWire.AI / – On Thursday, the U.S. dollar hovered close to a three-month minimum amid a continued decline in long-term Treasury yields. The dollar index was around 98.81 compared to six key currencies. The euro appreciated to approximately $1.1676, reaching its highest point since late May. Additionally, the Japanese yen gained ground, trading near 158.45 per dollar. Investors remain focused on new U.S. Treasury policies and the recent Federal Reserve meeting minutes.
The U.S. Treasury Department announced plans to expand liquidity-support buybacks for longer-term government securities. The maximum purchase amount will increase from $2 billion to $4 billion for qualifying transactions. This program applies to nominal coupon securities with maturities between 10 and 20 years, and between 20 and 30 years. The larger transactions are set to start on September 9 and run through November 4, marking the end of the current quarterly refunding cycle.
Following this announcement, long-term Treasury yields fell. The 30-year yield traded near 5.18% on Thursday after a sharp decline in the prior session. Earlier this week, it reached 5.337%, the highest since 2007. Yields on Treasury bonds have a significant influence on global currency and bond markets because they impact returns on dollar-denominated assets. The U.S. Treasury also plans to publish an updated tentative schedule for the expanded buyback operations.
Major World Currencies Rise as the Dollar Weakens
The dollar’s slide benefited several major currencies during Asian trading hours. The British pound traded around $1.3604, maintaining close proximity to a three-month high. The Swiss franc appreciated to roughly 0.7999 per dollar. The euro stayed above $1.16 after gaining from the previous trading session. Meanwhile, the yen moved further away from the 160-per-dollar level it had recently approached. The dollar index stayed below 99 and neared its lowest level since May.
Minutes from the Federal Reserve’s July 28 and 29 meetings revealed that policymakers remain concerned about persistent inflation. They kept the federal funds target range at 3.5% to 3.75%. Nine officials favored maintaining current rates, while three preferred a quarter-point hike. The Fed also noted that economic activity continues to grow at a solid rate. Inflation remains above the 2% goal, keeping price pressures central to the policy debate.
Federal Reserve Minutes Show Policy Disagreements Over Interest Rates
During the July meeting, several policymakers indicated readiness to support an interest rate hike. Many believed higher rates might be necessary if inflation did not trend toward the 2% target. The central bank maintained its current approach to reserves in the financial system. It also 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 both lower long-term yields and fresh U.S. policy updates. The dollar index stayed near levels recorded roughly three months ago. The 30-year Treasury yield remained below the 19-year high reached earlier in the week. The expanded government bond buybacks are set to begin in September, with the federal funds target range remaining steady. These factors continued to influence trading in foreign exchange and U.S. government debt markets on Thursday.