USD strengthens as Treasury 30Y auction shows strong demand at 4.844%

The US dollar gained ground across major pairs following a successful 30-year Treasury bond auction that yielded 4.844%, below the when-issued level of 4.859%. The $22 billion auction attracted robust international demand with a bid-to-cover ratio of 2.43x, surpassing the six-month average of 2.39x. Indirect bidders, primarily foreign central banks and institutions, took 65.2% of the auction, well above the 63.2% average, signaling strong overseas appetite for US debt. The negative tail of 1.5 basis points indicates aggressive bidding, supporting dollar strength as it reflects confidence in US fiscal stability. This successful auction helps alleviate concerns about Treasury market liquidity and could support the Federal Reserve's monetary policy flexibility. Near-term, the dollar index shows support at 104.50 with resistance at 105.20, as traders await upcoming inflation data for further directional cues.