Dollar Remains Under Pressure as Debt Concerns Drive Investors Towards Gold, Bitcoin
The U.S. dollar remained close to multi-month lows on Monday as growing concerns over government debt and rising long-term bond yields weighed on investor confidence. The currency has faced broad selling pressure in recent sessions, while traders turned their attention to upcoming U.S. policy signals and possible new sanctions against Iran.
The euro traded around $1.1665, close to its strongest level in three months, while the British pound remained near a six-month high at $1.3628. The Chinese yuan also stayed firm after recording its eighth consecutive weekly gain. The Canadian dollar, however, weakened after the United States imposed 50% tariffs on Canadian goods, prompting Ottawa to respond with similar measures.
Investor concerns have intensified after yields on long-term government bonds climbed sharply, reflecting expectations of persistent inflation, economic growth and rising sovereign debt. The U.S. Treasury recently announced plans to increase its purchases of long-dated bonds to $4 billion per operation after 30-year Treasury yields approached their highest level in almost two decades. Although the buyback programme is relatively small compared with the size of the U.S. bond market, its intervention has raised concerns about pressure on the currency.
The dollar’s weakness has meanwhile strengthened demand for alternative assets, with bitcoin gaining almost 23% against the currency last week and gold rising about 5%. Markets are also watching developments around possible U.S. sanctions on Iran and speeches by senior U.S. and Japanese central bank officials for clues about interest rates, bond-market policy and the direction of global currencies in the coming weeks.
