Large currency speculators in the US dollar futures fell from a three and half year high, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC). The non-commercial futures contracts of US dollar index futures, traded by large speculators and hedge funds, totaled a net long position of 19,079 contracts in the data reported through August 18, 2026, marking a decrease of 2,330 net positions compared to the previous week. This represents a significant reduction in bearish dollar positions as market participants reassess the effectiveness of Treasury's expanded buyback program. The dollar index, which measures the dollar against six other currencies, was at 98.82, down from 98.558 in the previous session, while the euro rose to $1.1685, on track for a weekly rise of 1% and sterling flirted with a six-month peak at $1.3643, up 0.08%. According to The Economic Times, U.S. Treasury Secretary Scott Bessent said overnight he may further increase the government's repurchases of Treasuries, a day after the department announced it would double the size of buybacks on longer-dated securities over the next quarter.
The U.S. Treasury has doubled its planned buybacks of longer-dated government debt to at least $4 billion per operation, targeting Treasury securities with maturities of 10 to 30 years as borrowing costs at the long end of the market have risen sharply. According to The Economic Times, the announcement has raised questions among investors about whether the Treasury could increasingly influence broader financial conditions that have traditionally been shaped primarily by the Federal Reserve. The program specifically targets off-the-run securities, providing primary dealers with a guaranteed buyer for illiquid bonds that trade infrequently and consume balance-sheet capacity. Federal Reserve Chairman Kevin Warsh's focus on restoring price stability could face complications as the Treasury takes a more active role in influencing long-term borrowing costs, particularly as the U.S. Treasury is increasing support for longer-dated bonds just days before the Federal Reserve's September policy meeting. The cap for buybacks in the 10–20 year and 20–30 year maturity buckets will rise from $2 billion to at least $4 billion per operation, with the change taking effect September 9 and remaining in place through November 4.
Goldman Sachs strategist Vitali Meschoulam noted that "Our scepticism is not that policymakers lack the tools to influence the long end. History shows they do, at least temporarily. Our scepticism is that today's problem appears increasingly fiscal rather than technical." The 30-year yield briefly dropped nearly 10 basis points to 5.187% on August 19, after touching 5.337% the prior day—its highest level since 2007, but concerns over the growing U.S. debt pile, which has topped $40 trillion, are driving investors toward alternatives. Carol Kong from Commonwealth Bank of Australia warned that "Potentially we could see such an action encourage more dollar hedging and diversification." The Australian dollar advanced 0.13% to $0.7123, while the New Zealand dollar added 0.23% to $0.5957 and was headed for a weekly rise of more than 1%. Jonathan Pryor, head of private markets & co-head of dealing at Marex FX, said "The Jackson Hole Symposium next week feels more pivotal than ever," noting that it comes against the backdrop of what the Treasury is doing, what the White House is saying and Warsh having to try and stamp his authority on the Committee.
Federal Reserve meeting minutes revealed policymakers' concerns about persistent inflation and potential rate hikes, with several officials ready to raise interest rates and many saying a hike in borrowing costs would be needed if inflation did not decline to the U.S. central bank's 2% target. According to The Economic Times, minutes from the July 28–29 FOMC meeting showed most officials favored holding the federal funds target rate at 3.50%–3.75%, while several supported a 25-basis-point increase; three members ultimately dissented in favor of a hike. The vote to hold rates at 3.50% to 3.75% passed 9 to 3, with Hammack, Kashkari and Logan dissenting in favor of a hike. Jonathan Pryor, head of private markets & co-head of dealing at Marex FX, said "The Jackson Hole Symposium next week feels more pivotal than ever," noting that it comes against the backdrop of what the Treasury is doing, what the White House is saying and Warsh having to try and stamp his authority on the Committee.
Gold is heading toward a third consecutive weekly gain, with the metal trading around $4,515/oz on Friday in Asia and up more than 3% on the week after Treasury's surprise decision to expand long-dated debt buybacks knocked yields and the dollar lower. According to Investing.com India, Gold was up more than 3% on the week after Treasury's surprise decision to expand long-dated debt buybacks knocked yields and the dollar lower. Scott Bessent subsequently indicated that the programme could be expanded further, while signalling that the administration will shortly outline a broader fiscal initiative aimed at addressing borrowing costs. The initial fall in Treasury yields has been largely retraced, but gold continues to absorb rate pressure remarkably well, holding above $4,000/oz since mid-July and up roughly 11% this month. The 30-year yield at the 5.0% level will be a key indicator of whether the buyback program is achieving its goal of compressing long-end yields and supporting continued risk-on positioning in crypto markets. The $4 billion buyback program is designed to repurchase older, less-liquid issues to improve market functioning, rather than expand the central bank balance sheet.
