US Dollar Extends Decline

2026-08-03 13:19 By Andre Joaquim 1 min. read

The dollar index fell to 99.8 at the start of August, the lowest in seven weeks amid fresh strength from the yen, while foreign investors maintained their partial pivot out of dollar positions from last week.

The Japanese yen extended its surge after the US Treasury bought more of the Japanese currency with its large euro holdings, magnifying the initial yen rebound when Tokyo intervened in the currency market.

The developments added to the dollar's slide following the Federal Reserve's last meeting.

The US central bank maintained its rates unchanged, as expected.

However, Fed Chairman Warsh signaled some reluctance to confirm that a rate hike would be his preferred reaction to higher inflation, leading foreign markets to trim holdings of dollar-denominated assets.

Still, rate futures show that over half of the market is positioned for Fed hike in September.



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