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Dollar slides below 99 as yen rally and yields soften

The US Dollar Index (DXY) was around 98.9, down 0.67% on the day, after a Japanese yen move and a retreat in Treasury yields trimmed rate hike odds.

Reported · Written up by our desk · Major Pairs

The US Dollar Index, which tracks the greenback against a basket of six major currencies, fell below 99.00 to its weakest level in more than a week. FXStreet said DXY was trading near 98.90, down 0.67% on the day, after rising to 99.86 on Wednesday.

A sharp rally in the Japanese yen drove much of the move, with USD/JPY falling for a second straight day by about 2% to around 155.45. The yen’s quick move has fueled renewed intervention speculation, including talk of a possible rate check, though Japanese authorities have offered no confirmation, FXStreet added.

FXStreet also pointed to a pullback in US Treasury yields as additional pressure on the dollar. The 10-year yield was around 4.75% after touching 4.81% on Wednesday, while less hawkish comments from Fed Governor Christopher Waller led traders to scale back expectations for a September rate hike.

Markets are now looking ahead to Nonfarm Payrolls, with traders reacting to the possibility of September policy changes. FXStreet noted that CME FedWatch put the probability of a September hike at about 50%, down from 63% a day earlier, and that Thursday’s US data were mixed, with Initial Jobless Claims rising to 206K and the ISM Services PMI increasing to 55.4 in August.

Latest closeUSD/JPY 158.82 ▼0.9%|Dollar index 99.58 ▼0.1%

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