Dollar sits at three-month low after Treasury moves to calm bond market

The US dollar stayed close to its weakest level in three months during the 19 August session, while US government bonds steadied after the Treasury acted to reassure buyers of its debt. The pattern matters because it shows where the adjustment is landing. When a government has to work to calm its own bond market, the relief often comes at the currency's expense rather than through higher yields. The backdrop was quiet elsewhere. China left its benchmark lending rates, the loan prime rates that guide bank pricing, unchanged for a fifteenth consecutive month. Oil prices were steady as traders weighed the outlook for a US-Iran conflict, an unusual combination of a live geopolitical risk and a flat crude market. What is unresolved is whether the Treasury's intervention buys more than a few sessions of calm. A soft dollar with stable yields is a comfortable mix for exporters and for holders of foreign assets. It becomes uncomfortable if the calm in bonds needs repeating.