Treasury Buyback Move Rattles Dollar, Boosts GBP/USD Bid

A surge in US Treasury yields set the tone for currency markets last week, prompting the Treasury Department to expand its long-term bond buyback programme. The move improved liquidity and briefly lowered borrowing costs, but it also chipped away at dollar strength, creating tailwinds for GBP/USD.

With US debt now above USD40 trillion and oil prices elevated, investors are increasingly asking whether Washington is quietly tolerating a weaker dollar to help stabilise the bond market. That question alone is enough to keep dollar bulls cautious.

For sterling, the implication is straightforward: as long as US fiscal dynamics generate uncertainty around dollar policy, GBP/USD has a structural tailwind. Traders should watch further Treasury actions and yield moves as the next catalyst for direction.