[Citigroup Lowers Dollar Forecast: Fed Dovish Turn and Treasury Buybacks Pressure Dollar] Citigroup's foreign exchange strategists have turned bearish on the short-term dollar outlook, as the market prepares for a more dovish Federal Reserve, the US midterm elections, and the US Treasury's further expansion of its Treasury buyback program. A team of Citigroup strategists led by Daniel Tobang lowered their three-month dollar index forecast to 98.34 from 102.12. Citigroup previously noted that Treasury Secretary Bessenter's recent move to lower long-term borrowing costs by expanding buybacks of 10- to 30-year US Treasury bonds could cost the dollar. The dollar index fell to its lowest level since May on Wednesday and remained largely unchanged around 98.9 on Thursday. The Citigroup team stated that their view on the dollar has been "relatively neutral" in recent months, but they have warned that the risks to the dollar may increase in the coming months.
