Dollar Index Trades Near 99.75-99.70, Hovering Around Three-Month Lows

The US dollar index faced renewed selling pressure during Friday's Asian trading session, stalling the rebound momentum from multi-month lows seen in the previous session. According to real-time quotes, the dollar index is currently trading near 98.76, continuing to hover in the three-month low territory since mid-May, with overall market sentiment tilted toward caution.

**US Treasury buyback operations weigh on dollar**

The US Treasury recently announced it will at least double the size of its liquidity support buyback operations for 10- to 30-year Treasuries, aiming to curb the sharp rise in long-term borrowing costs seen recently. Market sources indicate that this move signals official intent to play a more active role in the bond market, improving global dollar liquidity by controlling long-end yields, thereby putting pressure on the dollar exchange rate. In contrast, the Fed's July meeting minutes revealed that some policymakers lean toward raising rates this year to guard against inflationary pressures, but this hawkish signal failed to provide sustained support for the dollar.

**Key data and geopolitical risks intertwined**

The latest US retail sales data for July unexpectedly fell 0.6%, marking the first decline in nine months. The data further weakened market expectations for a Fed rate hike in September, weighing on the dollar. Meanwhile, uncertainties in the Middle East persist, with the US and Iran remaining at an impasse, keeping inflation risks in the spotlight. Analysts noted that with the government shutdown delaying the release of some key economic data, the market is currently more sentiment-driven, and no clear reversal signal has emerged in the dollar's weak posture.

**Technical levels in focus**

On the technical front, the dollar index has entered a sideways consolidation near 99 after a sharp pullback from the 101.4 high. According to analyst observations, 99.75 is viewed as a short-term bull-bear dividing line. As long as the index stays below this level, a bearish bias remains, and failure to reclaim this level could lead to further downside toward support.