Citigroup's foreign exchange strategy team cut its three-month US Dollar Index forecast from 102.12 to 98.34, shifting from a previously neutral view to a short-term bearish stance. The team, led by strategist Daniel Tobon, cited expanded U.S. Treasury buybacks, declining expectations for further Federal Reserve rate hikes and political uncertainty ahead of the November midterm elections. The Treasury Department said it would at least double buybacks of 10- to 30-year Treasuries before November, a move Citigroup says could suppress U.S. yields and raise concerns about financial repression (policies that channel savings toward government debt). The US Dollar Index traded around 98.9 on Thursday after reaching its lowest level since May in the previous session. Citigroup also raised its three-month EUR/USD forecast to 1.1750 from an unspecified prior target, citing expectations for a 25-basis-point European Central Bank rate hike in September and reduced Fed tightening bets. Its long-term dollar view remains unchanged, with U.S. growth prospects expected to outperform other Group of Ten economies. Risks to the bearish outlook include a U.S.-Iran conflict disrupting oil shipments through the Strait of Hormuz and a large increase in artificial intelligence-related capital spending that could revive inflation and prompt renewed Fed rate hikes.