The US dollar weakened again midweek, joining the selloff in long-dated Treasury securities. The greenback has struggled to maintain momentum after surging as much as 3% in the first half of 2026, driven primarily by investors shifting their expectations for Federal Reserve policy and Treasury yields surging.

The US Dollar Index (DXY), which measures the greenback against a weighted basket of currencies, fell 0.82% to 98.84, from an opening of 99.66 at 19:03 GMT on Wednesday. The index has declined more than 2% this month and is up just 0.5% year-to-date.

Investors are increasingly betting that the Fed will not raise interest rates at next month’s Federal Open Market Committee (FOMC) policy meeting, mainly because of softer economic data.

Minutes from July’s meeting, however, suggest that officials agree it would be prudent to raise interest rates if inflation remains firmly above the central bank’s 2% target.

“Many participants assessed that policy tightening would likely be necessary if inflation did not decline,” the meeting summary stated. “Some participants commented that financial conditions might not currently be sufficiently restrictive to facilitate a return of inflation to 2 percent.”

But the Fed will still have another batch of inflation and employment data before it convenes its September 15-16 policy meeting.

Meanwhile, the Treasury Department announced on Wednesday that it will bolster its debt buyback operations, a decision that comes as interest rates have rocketed.

The Treasury will increase its government bond repurchases to at least $4 billion, up from the current $2 billion campaign, to support liquidity conditions for longer-dated Treasury securities.

The news helped stabilize yields, with the 30-year falling below 5.2%. This comes as the 30-year Treasury yield hit 5.31%, its highest level since June 2007.

“While the announcement may provide short-term relief, we do not believe it fundamentally changes the outlook for long-term yields,” said Tony Miano, global investment strategy analyst at Wells Fargo Investment Institute, according to CNBC.

“The key drivers behind rising yields, including uncertainty around inflation, monetary policy, and the trajectory of government debt, remain in place,” he added. “Until investors gain greater clarity on those issues, risks to long-term Treasury yields remain skewed to the upside.”

The USD/CAD currency pair declined 0.65% to 1.3809, from an opening of 1.3899, at 19:10 GMT on Wednesday. The EUR/USD advanced 0.85% to 1.1676, from an opening of 1.1578.