US Dollar Hits 3-Month Low, Gold Hits 3-Month High on Treasury Buyback Plan

The US Treasury's expanded buyback program, aimed at calming long-term yields in the Treasury market, has sent the US dollar and gold prices moving in opposite directions.

In the New York foreign exchange market on the 19th local time, the US Dollar Index (DXY), which measures the greenback's value against six major currencies including the euro and the Japanese yen, fell 0.8% to 98.84.

This marks the lowest level since May 14.

As G10 currencies broadly strengthened against the dollar, the Japanese yen rose as much as 1% at one point to 158.05 yen per dollar, reaching a one-week high.

Meanwhile, on the COMEX, gold prices hovered around 4,490 dollars per ounce, up 3.6% as of 6:30 p.m., hitting their highest level since May 29.

Earlier in the day, the US Treasury announced that it would more than double the size of its liquidity support buybacks for 10-to-20-year and 20-to-30-year Treasury sectors, raising the maximum cap per operation from 2 billion dollars to at least 4 billion dollars.

Following this measure, the 30-year Treasury yield dropped significantly from the previous day's post-2007 high of 5.337%.

Falling interest rates have contrasting effects on the dollar and gold.

Lower interest rates reduce the relative appeal of US Treasuries, leading to a decline in foreign capital inflows and subsequently weakening demand for the dollar.

Conversely, gold, a non-yielding safe-haven asset, becomes more attractive as market interest rates fall and the dollar weakens.

Silver prices also rose 4.8% on the day, rallying alongside gold.

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.