Strong US 20-year Treasury auction boosts dollar across major pairs

The US dollar strengthened following an exceptionally well-received $13 billion 20-year Treasury bond auction, with yields settling at 4.935%, below the When-Issued level of 4.951%. The auction displayed remarkable demand characteristics, featuring a negative tail of -1.6 basis points versus the -0.1 average, and a bid-to-cover ratio of 2.79x compared to the typical 2.62x. Direct bidder participation surged to 21.86% from the 18.0% average, signaling robust domestic appetite for US debt. The dollar index climbed 0.3% to 104.25, with EUR/USD dropping to 1.0915 and GBP/USD sliding to 1.2840. The strong auction results reinforced expectations that the Federal Reserve can maintain higher rates without destabilizing the bond market. Technical analysis shows the dollar index approaching resistance at 104.50, with momentum indicators suggesting further upside potential if Treasury demand remains elevated.