Dollar may become biggest loser from US bond buyback, say experts

Ruth Carson & Momoka Yokoyama / Bloomberg

Aug 20

Some market participants see the bond buyback as a turning point, with Washington taking a more active role in keeping its borrowing costs down. (Aug 20): Treasury Secretary Scott Bessent's bold ...

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(Aug 20): Treasury Secretary Scott Bessent's bold ...</p>\n\n<a href=\"https://www.theedgesingapore.com/news/currencies/dollar-may-become-biggest-loser-us-bond-buyback-say-experts?utm_source=Blog&utm_medium=RSS&utm_campaign=Tiger_Brokers_app_RSS\">Source Link</a>\n\n</div>\n","source":"edge_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Dollar may become biggest loser from US bond buyback, say experts</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDollar may become biggest loser from US bond buyback, say experts\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-08-20 07:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.theedgesingapore.com/news/currencies/dollar-may-become-biggest-loser-us-bond-buyback-say-experts?utm_source=Blog&utm_medium=RSS&utm_campaign=Tiger_Brokers_app_RSS><strong>Ruth Carson & Momoka Yokoyama / Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Some market participants see the bond buyback as a turning point, with Washington taking a more active role in keeping its borrowing costs down. (Aug 20): Treasury Secretary Scott Bessent's bold ...</p>\n\n<a href=\"https://www.theedgesingapore.com/news/currencies/dollar-may-become-biggest-loser-us-bond-buyback-say-experts?utm_source=Blog&utm_medium=RSS&utm_campaign=Tiger_Brokers_app_RSS\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"RAUS","symbol_name":"RACWI US ETF","start_time":0,"source_url":"https://www.theedgesingapore.com/news/currencies/dollar-may-become-biggest-loser-us-bond-buyback-say-experts?utm_source=Blog&utm_medium=RSS&utm_campaign=Tiger_Brokers_app_RSS","article_id":"2661234313","we_media_id":null,"thumbnails":[],"rights":{"source":"edge_highlight","url":"https://www.theedgesingapore.com/news/currencies/dollar-may-become-biggest-loser-us-bond-buyback-say-experts?utm_source=Blog&utm_medium=RSS&utm_campaign=Tiger_Brokers_app_RSS","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2661234313","pubTimestamp":1787182265,"columns":[],"sourceInfo":{"source_id":"edge_highlight","name":"Edge"},"weMediaInfo":null,"summary":"Some market participants see the bond buyback as a turning point, with Washington taking a more active role in keeping its borrowing costs down. ","collect":0,"end_time":0,"defaultTopTitle":"theedgesingapore.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"RAUS":"RACWI US ETF","BNDW":"Vanguard Total World Bond ETF"},"translate_title":"专家称美元可能成为美国债券回购的最大输家","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"RAUS":0.66,"BNDW":1.5},"content_text":"Some market participants see the bond buyback as a turning point, with Washington taking a more active role in keeping its borrowing costs down. (Aug 20): Treasury Secretary Scott Bessent's bold intervention to stem a potentially damaging rise in US borrowing costs has some investors saying the dollar will ultimately pay the price.\nSome market participants see the move as a turning point, with Washington taking a more active role in keeping its borrowing costs down. Coming after other recent efforts to rein in long-term yields, it's reviving a concern that US policy could weaken faith in the dollar and push investors toward alternatives.\n\"The dollar certainly is the biggest casualty,\" said Gerald Gan, chief investment officer at multi-family office firm Reed Capital in Singapore. He sees Bessent as deliberately pushing down long-term real rates and signaling a tolerance for a weaker dollar to keep the economy afloat.\n\"I would further diversify away from the dollar,\" he added.\nThe Treasury said Wednesday it would \"at least double\" planned purchases of outstanding 10- to 30-year bonds after borrowing costs surged to multi-year highs, making Bessent the most interventionist Treasury chief in decades. The move marked a departure from the department's longstanding \"regular and predictable\" approach to debt management - something Bessent himself endorsed in a speech in November.\n\nAny attempt to engineer US yields lower can reduce the attractiveness of dollar-denominated debt relative to assets elsewhere. And if investors see the goal as easing the path for additional American borrowing, that can also have the impact of devaluing the US currency.\nA Bloomberg gauge of the greenback held at around a three-month low on Thursday, after falling about 0.8% the previous day. The yen, Swiss franc and New Zealand dollar were among the biggest gainers against the US currency on Wednesday.\nThe buyback plan comes just weeks after the US joined Japan in intervening to support the yen, adding to the sense that policymakers are panicking, said Amir Anvarzadeh, strategist at Asymmetric Advisors in Singapore.\n\"I don't think they are trying to weaken the dollar so much but to try to stabilise the yields - but the sacrificial lamb is the dollar,\" he said.\nBloomberg Intelligence also sees the move as potentially bearish for the dollar. \"Traders are likely to view this as an attempt to suppress market pricing around US fiscal sustainability and the Fed's inflation-fighting credibility,\" Stephen Chiu, chief emerging markets FX strategist, wrote in a note.\nSurging yields\nLong-term Treasury yields surged this week as investors demand more compensation to lend to a government with a growing debt burden. Inflation worries and competition from a wave of corporate borrowing added to the pressure, pushing the 30-year yield to levels last seen in 2007, even as expectations for an imminent Federal Reserve rate hike have faded.\nWashington was already showing signs of concern before Wednesday's buyback announcement. After the US joined Japan in supporting the yen late last month, Bessent floated using a Fed facility to finance further intervention if needed. The moves were seen as reducing the risk that Japan would have to sell Treasuries to raise dollars to defend its currency.\nTogether with President Donald Trump's occasional embrace of a weaker dollar, the actions have reinforced a sense among some investors that Washington is increasingly willing to intervene in markets to keep borrowing costs in check.\n\n\"Bessent would welcome these FX movements, as the Trump administration has been praising the benefits of a weaker dollar as a way to increase US competitiveness and reduce trade imbalances,\" Evercore ISI strategists including Marco Casiraghi wrote in a note.\nAndrew Canobi, a director of fixed income at Franklin Templeton in Melbourne, sees the bigger story playing out in currencies. Bessent is \"effectively saying we're prepared to sacrifice a bit of dollar strength in order to keep term yields somewhat in check,\" he said. \"Something has to be the relief valve.\"\nThe alternative would be to tackle the country's structural problems, he said - a much harder path - leaving policymakers to either manage yields or allow the dollar to weaken.\nThe dollar has weathered similar hand-wringing before. The Fed's massive bond-buying programs in the past stoked concerns that attempting to suppress yields and expanding its balance sheet could debase the currency. More recently, investors cut exposure amid Trump's tariff threats and pressure on the Fed. None has dislodged the dollar from its dominant role in global markets.\nNot everyone sees an immediate threat to the dollar. It still has strong near-term support from AI-driven inflows into US equities and higher oil prices, according to Masahiko Loo, senior fixed income strategist at State Street Investment Management.\nBut Loo said the latest measures reinforce a longer-run case for de-dollarisation and currency debasement. As sovereign AI initiatives and data-centre buildouts broaden beyond the US, the exceptional capital-flow advantage enjoyed by the US today could gradually erode, he added.\n\"The dollar is shaping up as the weak link for investors weighing Treasury buybacks against the US's widening fiscal deficit. That gives Asian currencies room to run,\" said Bloomberg strategists.\nShoki Omori, Deutsche Bank AG's chief fixed income strategist for Japan, said greater liquidity support for Treasuries comes almost by construction at the dollar's expense.\nThe price action was telling. Short-term bonds got sold off and Fed hike expectations held firm, yet the dollar fell broadly - a sign that investors are looking beyond interest-rate differentials and questioning the broader US policy mix, he said.\nHe expects the yen to be the biggest beneficiary over the next three to six months, as Washington's recent moves are removing two forces that have kept the currency weak, namely the need for Japan to sell Treasuries to finance intervention and the pressure from rising US long-term yields. He also favors gold, followed by the Swiss franc and euro, as alternatives to the dollar.\n\"The Treasury can buy back its bonds; it cannot buy back the dollar,\" he said.\nUploaded by Magessan Varatharaja","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}