Dollar sinks on Treasury buybacks; gold finally clears $4,400

US Treasury buybacks sent the dollar to three-month lows, lifting gold above $4,500 and handing the yen a bid, with Australian employment data ahead.

Dollar under pressure, safe-havens gain

• The dollar plummeted to its lowest level in three months as US Treasury bond repurchases sank US yields, overshadowing the Federal Reserve's alerts on inflation. The Treasury doubled its buyback cap, and of the $20 billion dealers offered it took $2 billion. That overruns yesterday's picture, when the greenback was firming on Middle East nervousness: FXStreet noted the dollar index responded to the Treasury, not the Fed.
• Gold surged above $4,500, clearing in a single session the $4,400 ceiling that had turned it back for five, as the US dollar and yields fell - InvestingLive reported the surprise Treasury announcement made gold rise. Silver also gained, with FXStreet analysts targeting $67 for XAG/USD.
• The Japanese yen was "unwittingly" bought by Washington. Japan's July exports and imports exceeded expectations, driven by a 49% increase in semiconductor shipments from the AI boom.
• The Australian and New Zealand dollars both recovered, with the Treasury buyback plan dragging down US yields, according to FXStreet.
• President Trump announced a "crushing economic operation" against Iran, according to FXStreet, which could fuel safe-haven demand.
• WTI crude held above $84.50 as that same Strait of Hormuz standoff escalated, keeping crude in the $84-85 band it has held since Tuesday.

European currency moves and market sentiment

• The euro rose, as traders appeared to disregard hawkish minutes from the Federal Reserve, according to FXStreet. However, our intraday strength gauge ranks the euro as the weakest currency today.
• The British pound reached its best level since May - the three-month high it touched and lost on Tuesday, then reclaimed on Wednesday - with FXStreet noting the move was made in Washington rather than London. Sellers were observed taking control of GBP/JPY below its 50-day SMA.
• The Swiss franc stands out as the strongest currency today, with USD/CHF testing its 100-day SMA amidst the dollar's retreat.
• Our FSI registers at 66, indicating Greed in the market, while the CTS is high at 79. The MRS steadies at 49, barely above yesterday's 47 and still far from Monday's 66 - readiness stays low just as the moves get bigger.

Key events today

• AUD · Employment Change · SCHEDULED: forecast 11.7K vs previous 76.3K
• AUD · Unemployment Rate · SCHEDULED: forecast 4.4% vs previous 4.4%
• USD · Philly Fed Manufacturing Index · SCHEDULED: forecast 24.1 vs previous 41.4
• USD · Unemployment Claims · SCHEDULED: forecast 210K vs previous 209K
• CNY · Loan Prime Rate (1y / 5y) · SCHEDULED: forecast 3.00% / 3.50%, both unchanged