The US Dollar (USD) took a beating on Wednesday after US Treasury Secretary Scott Bessent announced a plan to buy back long-term government debt to ease Bond yields. The USD Index (DXY), which measures the value of the Dollar against a basket of six majors, dropped nearly 0.9% on the day to find support at the three-month low of 98.75, which is being tested at the time of writing.
Deutsche Bank’s Analyst George Saravelos affirmed that the initiative amounts to a “soft-form financial repression policy aimed at containing the long-end of the US yield curve, and this was negative for the Dollar.” Saravelos argues that “if the market price of US Treasuries isn’t ‘allowed’ to adjust lower, then the foreign exchange price of…