City warns on dollar and debt buybacks
Citigroup Bank has lowered its forecast for the US dollar index to 98.34 over the next three months, warning that the Treasury Department's expansion of long-term Treasury bond buybacks could put downward pressure on the currency's value and lead to lower yields. Their prediction is based on the idea that increased buyback operations could negatively impact the dollar by reducing bond yields and sparking financial concerns, especially with the midterm elections approaching and expectations of easing by the Federal Reserve. Conversely, they have raised their forecast for the euro versus the dollar to 1.1750, driven by expectations of the European Central Bank raising interest rates, with the pair stabilizing around 1.17 dollars, reflecting the tension between the Federal Reserve's stance and global interest rate outlooks.
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