The dollar dropped to its lowest of the week and remained defensive as U.S. Treasury yields fell to fresh lows after another well-received auction saw $28 billion of 7-year notes snapped up at a yield of 2.284%, while month-end portfolio rebalancing also weighed, though foreign exchange flows remained modest and participation light overall. The dollar was also pressured Wednesday when Treasury yields fell after an auction of 5-year notes was equally well-received by investors. Yields fell along the curve today as markets got jostled by year-end trading flows; the yield on the U.S. 10-year briefly fell below 2.46%, the lowest since Dec. 14. The greenback relinquished weekly gains that had seen it peak near its Dec. 20 high, the highest level since 2002, as measured by the DXY Dollar Index. Some FX flows may have moved up to today amid investor concerns about poor liquidity on the last day […]