Goldman Sachs says strong US dollar during Iran war dragged down foreign official demand for US Treasuries

Goldman Sachs strategist Isabella Rosenberg wrote in a report on Wednesday that the US dollar is "one of the most significant drivers of foreign official demand for US Treasuries after adjusting for valuation." The scale of US Treasuries held by foreign entities declined from a record high in March, while the US Dollar Index rose by 2.4%, marking its largest single-month gain since July. Rosenberg pointed out that these changes appear to coincide with some foreign governments working to support their own currencies and mitigate capital outflows during wartime. She stated that this is likely a temporary pattern and does not indicate a structural shift in demand for US Treasuries.