FX.co ★ Dollar Poised for Weekly Drop

The dollar index traded around 98.8 on Friday and was on track to lose nearly 1% for the week, as the US government’s bond buyback plan stirred market volatility and strengthened demand for safe-haven metals and alternative currencies at the expense of the greenback. The index dropped sharply on Wednesday after the US Treasury Department announced an expansion of its debt buyback program aimed at containing borrowing costs. Long-term Treasury yields initially fell on Wednesday but rebounded the following day amid skepticism that the plan might offer only a short-lived remedy. These moves highlighted growing unease over the rise in US government debt, reducing the dollar’s appeal to investors. At the same time, higher oil prices, as the US prepares sweeping new economic sanctions against Iran, further fueled inflation concerns.