Daily Market Report
08/20/2026
EUR/USD ranged in the high 1.16s to low 1.17s overnight. The Euro (EUR) extends gains against an ailing US Dollar (USD) on Thursday, as the US Treasury’s plan to boost buybacks of long-term Government Bonds sent the Greenback tumbling across the board. The EUR/USD pair trades right above 1.1700 at the time of writing after surging about 1.13% from Wednesday’s lows.
The US Treasury Department announced on Wednesday its decision to double the size of liquidity support buyback operations for longer-dated securities, to at least 4 billion per operation, from the current maximum size of $2 billion from September 9 on.
This plan is aimed at easing yields on long-term Government Bonds, under pressure this week, after data from the Treasury Department revealed that national debt rose above $40 trillion, prompting investors to demand higher compensation for holding US debt.
GBP/USD extends its gains for the second successive day, trading around 1.3630 during the European hours on Thursday. The pair appreciates as the US Dollar (USD) faces challenges, driven by the decision of the US Treasury Department to stabilize domestic bond markets.
The upside of the GBP/USD pair could be restrained as the Greenback may receive safe-haven support from geopolitical friction in the Strait of Hormuz, where tensions between the US and Iran have intensified. While President Donald Trump noted that oil transit continues and expressed openness to negotiations with Tehran, elevated risk aversion continues to favor the US currency.
USD/JPY appreciates after registering modest losses in the previous day, trading around 158.50 during the Asian hours on Thursday. The currency pair gains ground as the Japanese Yen (JPY) struggles under the weight of wide interest rate differentials, mounting fiscal concerns, and elevated costs for energy and imported goods.
Japan’s Merchandise Trade Balance Total showed the trade deficit widened sharply to JPY 634.5 billion in July from JPY 409.9 billion the prior month. Although the figure came in below the market forecast of a JPY 680.0 billion deficit, it marks the third consecutive month in the red and the largest deficit recorded since January, driven by import growth outstripping export gains.
Source: FX Street