Dollar Index Falls as U.S. Treasury Doubles Long-Term Debt Buyback Scale

The news that the U.S. Treasury has doubled the scale of its long-term debt buyback program sent long-end Treasury yields sharply lower on Wednesday and put renewed pressure on the dollar index, which was trading near 98.867. The market viewed the move as a signal of demand-side support for long-dated Treasuries, while also deepening investor doubts about the attractiveness of dollar assets.

**Buyback Doubling Pressures Long-End Yields**

According to reports, the Treasury's decision to double the scale of its long-term debt repurchases directly pushed down yields on longer-dated securities such as the 30-year. The U.S. Treasury market had already been through multiple rounds of volatility as the "American exceptionalism" narrative faded, and Moody's downgraded the U.S. sovereign credit rating from AAA to AA1, keeping concerns over deficient long-end demand alive. The expanded buyback was interpreted as the Treasury actively absorbing supply pressure at the long end, easing near-term upside risking in yields but also removing some of the interest-rate support for the dollar.

**Dollar Weakness Continues**

The dollar index has continued to trade soft in the wake of the buyback news. Market data show that iyo, after the Bloomberg Dollar Index fell 8.1% in 2025, the index has fallen more than 2% this year. Jeffrey Gundlach, CEO of DoubleLine Capital, said in a CNBC interview that the dollar has not played a safe-haven role for some time, and that investors now prefer physical safe havens such as gold and silver. Damian Ro, chief investment officer at Eriksz Capital, said the U.S. may still want to see the dollar weaken gradually, but also e trying to avoid a disorderly decline.

**"Currency Depreciation Trade" Logic Strengthens**

The dollar's descent over the past year has been characterized by the market as a "currency depreciation trade," driven by concerns over unpredictable domestic policies, a massive fiscal deficit and isolationist tendencies. The enlarged repurchase program helps stabilize the longer-dated Treasury market, but may also be read as a reactive response to fiscal debt sustainability, further entrenching expectations of a long-term decline in the dollar's purchasing power. In the near term, the dollar index still lacks clear rebound momentum around the 98.867 area, and its next move may depend on the recovery of Treasury demand and policy signals.