The dollar index hovered near 98.8 on Monday, extending last week’s sharp losses as a surge in Treasury yields intensified concerns over the US government’s growing debt load and undermined the currency’s appeal. The latest leg lower in the greenback followed comments from Treasury Secretary Bessent, who outlined a debt-buyback initiative dubbed a “Treasury twist.” Under this plan, the government would repurchase longer-dated Treasury securities in an effort to influence the yield curve and better manage borrowing costs.
At the same time, investors kept a close eye on developments in the Middle East, with Washington expected to unveil additional sanctions against Tehran. Iran, already subject to decades of US restrictions, dismissed the anticipated measures as “bound to fail.”
Market participants are now focused on upcoming US economic releases and fresh signals on Federal Reserve policy. In particular, attention is turning to the July PCE inflation report and remarks from Fed Chair Kevin Warsh at the Jackson Hole economic symposium later this week.
