Amman – The US dollar hovered near its lowest levels in several months on Monday as markets remained unsettled by the US Treasury Department’s pledge to increase buybacks of longer-term bonds. Investors are also awaiting details of potential sanctions on Iran and signals on monetary policy from the United States and Japan later this week.
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The Canadian dollar fell 0.2% in early trading to 1.3798 per US dollar after trade negotiations with the United States collapsed and Washington imposed 50% tariffs on Canadian goods, prompting Ottawa to respond with reciprocal measures.
The Australian and New Zealand dollars traded near their three-month highs at $0.7171 and $0.5979, respectively.
The euro comfortably surpassed the $1.16 level, reaching $1.1685, while the yen remained relatively strong at around 159 per dollar.
Data released on Friday showed that US services sector growth in August reached its strongest pace in nearly two years, helping limit pressure on the dollar’s sellers during early trading, which was otherwise relatively stable.
On Sunday, the dollar recorded its largest weekly decline against Bitcoin in nearly three and a half years, while it also fell sharply against gold amid renewed concerns that the currency could come under pressure if the United States attempts to push yields lower.
Long-term bond yields around the world have risen amid a combination of strong economic growth expectations, forecasts for higher inflation and concerns over rising sovereign debt.
After 30-year Treasury yields reached their highest level in nearly two decades last week, the US Treasury announced that it would double its buyback operations for longer-term bonds to $4 billion per operation.
Although the amount is small compared with a market valued at approximately $32 trillion, the prospect of intervention unsettled investors and weighed on the dollar.
The British pound was steady at $1.3650 in early trading, while the yuan hovered near its strongest level in three years at 6.7222 per dollar, following its eighth consecutive weekly gain last week.
Later on Monday, US Treasury Secretary Scott Bessent is scheduled to hold a press conference after threatening to impose the “toughest sanctions in history” on Iran, with markets closely watching whether China could also be targeted.
Iranian Foreign Minister Abbas Araghchi described the threat of new US sanctions as a sign of desperation.
Market participants are also looking for greater clarity on the outlook for US interest rates when Federal Reserve Chair Kevin Warsh speaks at the Jackson Hole symposium in Wyoming on Friday.
A speech by Bank of Japan Deputy Governor Ryozo Himino on Thursday will also be closely watched as a potential indication of the central bank’s stance ahead of its monetary policy meeting scheduled for next month.
