USD Pressured as ING Sees Treasury Yields Rising Further on Truce Lapse

ING expects the heavy tone in US Treasuries to persist as the tariff truce lapses, a dynamic that keeps long-end yields biased higher and complicates the dollar's recovery attempts. The latest TIC data showed headline foreign holdings of Treasuries declining, with Japan, the UK and China all trimming positions. The transaction picture was more mixed: one measure showed a modest $6.8 billion net inflow in June, while ING's TIC-based read pointed to roughly $72 billion of net liquidation by foreign holders, highlighting how measure-dependent and volatile this series has become month to month. For FX, reduced foreign appetite for Treasuries is a structural negative for USD, even if higher yields offer short-term carry support. Rising term premium alongside softening demand typically pressures USD/JPY funding flows and supports EUR/USD dips. Traders should watch the 10-year yield's response to any renewed trade friction, as a disorderly yield rise tends to weigh on the dollar rather than lift it, keeping EUR/USD and USD/JPY volatility elevated into upcoming US data.