WASHINGTON, D.C. / RankWire.AI / – On Thursday, the U.S. dollar hovered close to a three-month minimum, continuing its decline as yields on long-term Treasury securities moved lower. The dollar index hovered around 98.81 against six major currencies. The euro appreciated to approximately $1.1676, reaching its highest point since late May. Meanwhile, the Japanese yen also gained strength, trading near 158.45 per dollar. Investors remained attentive to new U.S. Treasury measures and the latest Federal Reserve meeting minutes.
The U.S. Treasury Department announced plans to increase liquidity support buybacks for longer-dated government securities. The maximum purchase amount will be raised from $2 billion to $4 billion for eligible operations. This program targets nominal coupon securities with maturities between 10 and 20 years and those between 20 and 30 years. These larger transactions will commence on September 9 and run through November 4, which marks the conclusion of the current quarterly refunding period.
Following the announcement, long-term Treasury yields declined. The 30-year yield traded near 5.18% on Thursday after experiencing a sharp decline in the previous session. It had earlier climbed to 5.337% this week, marking the highest level since 2007. Treasury yields significantly influence global currency and bond markets by impacting returns on dollar-denominated assets. The U.S. Treasury Department also plans to issue an updated tentative schedule for the expanded buyback operations.
Major currencies gain momentum as the dollar weakens
The decline in the dollar supported gains in several leading currencies during Asian trading hours. The pound traded around $1.3604, remaining close to a three-month high. The Swiss franc appreciated to roughly 0.7999 per dollar. The euro stayed above $1.16 after advancing in the previous trading session. The yen moved further away from the 160-per-dollar mark it recently approached. Meanwhile, the dollar index stayed below 99 and hovered near its lowest point since May.
Minutes from the Federal Reserve’s July 28 and 29 meetings revealed that policymakers remained focused on persistent inflation. The central bank maintained the federal funds target range at 3.5% to 3.75%. Nine policymakers supported holding rates steady, while three favored a quarter-point hike. Additionally, the Fed indicated that economic activity continued to grow at a solid pace. Inflation remained above the 2% target, keeping price pressures central to policy considerations.
Disagreements emerge among Fed members over interest rate hikes
At the July meeting, several policymakers expressed readiness to support an increase in interest rates. Many suggested higher rates could be necessary if inflation did not trend toward the 2% goal. The central bank maintained its current approach to reserves within the financial system and continued rolling over principal payments from Treasury securities at auction. The Federal Reserve is scheduled to hold its next policy gathering on 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 seen about three months ago. The 30-year Treasury yield stayed below the 19-year high achieved earlier this week. The expanded government bond buyback program will launch in September, while the federal funds target rate remains unchanged. These factors continue to influence trading in foreign exchange markets and U.S. government debt throughout Thursday.