USD softens as Treasury doubles long-end buybacks, boosting market liquidity

The US dollar is trading with a softer bias across the majors after the US Treasury announced it is doubling the size of its liquidity support buyback operations for longer-dated securities. The measure injects additional cash into the long end of the curve, easing the recent heavy tone in Treasuries and capping the rise in 10- and 30-year yields that had been underpinning the greenback. Traders read the move as a form of quasi-easing on the fiscal side: more liquidity, better market functioning, and reduced term premium pressure, all of which typically weigh on USD while supporting risk assets. The key question is durability, as buybacks address plumbing rather than the underlying supply-demand imbalance created by heavy coupon issuance. For EUR/USD, a sustained drop in long-end yields would favour a grind toward recent highs, while USD/JPY remains most sensitive to the yield differential and would likely lead any dollar decline. Traders should watch 10-year yields and the next refunding schedule for confirmation of follow-through.