US Dollar Index Falls Below 99.00 on US Fiscal Concerns

The dollar index broke below the 99.00 mark during Asian trading on Monday, currently trading near 98.83, extending the weakness seen since last week. Following the US Treasury's announcement of an expanded long-dated bond buyback program, concerns over rising US debt have continued to build, with the dollar's appeal to investors notably diminishing.

**Fiscal Buybacks Trigger Ripple Effects**

The US Treasury's announcement of an expanded long-dated bond buyback initially drove long-end yields lower, but concerns that the program may only offer a temporary solution prompted yields to rebound the following day. This volatility highlights deep-seated market doubts over the sustainability of US government debt, weighing on the dollar index, which had already fallen to near multi-month lows last week. According to market reports, the dollar index posted a weekly decline of nearly 1% last week.

**Safe-Haven Demand Diverts Dollar Buying**

As the dollar weakened, safe-haven flows shifted toward other assets. Reports show gold prices surged over 6% within a week, while major Asian currencies strengthened broadly, with the yen recovering to around the 158 level against the dollar. Market movements indicate that amid rising uncertainty over the US fiscal outlook, investors are rotating safe-haven demand from the dollar into precious metals and other currencies.

**Inflation and Oil Prices Add Uncertainty**

With the US preparing to impose comprehensive new economic sanctions on Iran, rising oil prices have intensified inflation concerns, further undermining the dollar's traditional role as a safe-haven asset. According to Trading Economics' global macro model projections, the dollar index may trade near 99.44 by the end of this quarter and is expected to hover around 97.92 over the next 12 months, reflecting institutions' cautious stance on the dollar's medium-term trajectory.