USD faces pressure as Treasury borrowing jumps to $1.007T in Q3

The US dollar showed weakness across major pairs following the Treasury's announcement of significantly increased borrowing plans for Q3 2025, jumping to $1.007 trillion from previous estimates made in April. This substantial increase in debt issuance comes after months of constrained borrowing due to debt ceiling limitations earlier in the year. The announcement has raised concerns about increased Treasury supply potentially weighing on bond prices and yields, creating headwinds for the dollar. Market participants are now awaiting tomorrow's quarterly refunding announcement for additional details on auction sizes and maturity composition. The increased borrowing needs reflect ongoing fiscal pressures and could influence Federal Reserve policy considerations. Technical indicators suggest USD index testing support at 103.50, with potential further weakness if Treasury yields continue to adjust to the supply dynamics.