Long-term government bond yields in the U.S., Europe, and Asia fell after the U.S. Treasury announced it would double its debt buyback operations. The move provided a backstop for the market, though short-term yields remain pressured by hawkish central bank expectations.
Asian currencies held firm while the U.S. dollar hovered near a three-month low after the Treasury Department announced expanded bond buybacks, easing a recent surge in long-term yields.
The U.S. dollar fell Friday after retail sales data missed expectations, reinforcing bets against further Federal Reserve rate hikes. However, the currency remained on track to post its first weekly advance in three weeks.
The policy-sensitive 2-year Treasury yield held near multi-week lows on Friday, as cooling inflation reports overshadowed earlier pressure from rising oil prices and geopolitical tensions in the Persian Gulf.
The British pound advanced against the U.S. dollar on Friday, a move primarily driven by a broader decline in the greenback as traders pare back expectations for further Federal Reserve interest rate hikes.
The Reserve Bank of India announced it will close its discounted forex swap window for banks a month ahead of schedule, citing the program's success in attracting over $5.6 billion in foreign currency since June.
UBS strategists are recommending a long position in the U.S. dollar against the Canadian dollar, targeting a rate of 1.425, citing the ongoing impact of interest rate differentials between the two countries.
Short-term Treasury yields hovered near multi-week lows on signs of a cooling U.S. economy, while long-term yields remained firm due to oil supply risks from tensions in the Persian Gulf. Investors are awaiting key PMI data and the Federal Reserve's Jackson Hole symposium for further direction.
A failure by Japanese authorities to intervene if the dollar-yen rate surpasses 160 could be seen as a sign of weak resolve, potentially sending the currency pair toward 165, according to BofA Securities.
