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US Dollar: Pressure builds as risk premia rise – ABN AMRO

US Dollar: Pressure builds as risk premia rise – ABN AMRO

FXStreetFXStreet2026/08/26 14:24

ABN AMRO’s Georgette Boele notes that sentiment towards the Dollar is weakening as fiscal concerns and rising risk premia outweigh the support from higher US Treasury yields. The Treasury’s expanded buyback programme has failed to reassure investors, who remain focused on US debt dynamics and fiscal risks.

Dollar pressured by debt concerns

"Even before the announcement, the US dollar was struggling despite higher US Treasury yields, as investors were concerned about fiscal deficits and rising risk premia."

"After the announcement, US Treasury yields fell and the US dollar came under even more pressure across the board."

"The euro has benefited from this dollar weakness and is likely to continue doing so if the dollar falls further."

"In this environment, the risk premium appears to be a more important driver of the US dollar than nominal yields."

"Indeed, since the start of July, the US term premium has been on an upward trend, while the US dollar has moved lower."

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