Dollar Dips Amid Fed Caution and Japan Intervention

The US dollar is on track to experience a significant weekly decline, falling more than 1% as of Friday's trading. This decrease comes amidst concerns over the Federal Reserve's cautious policy stance and a suspected Japanese intervention in the foreign exchange market.

The dollar index traded near 100 on Friday after slipping for three consecutive sessions. The greenback saw a notable drop against the yen, plummeting by up to 3.3% on Thursday. This decline is attributed to Tokyo's alleged involvement in supporting the yen.

US Treasury Secretary Scott Bessent voiced his opinion that the yen is 'very undervalued' and expressed concerns over excessive currency volatility being unhealthy. Despite this, interest rates remained unchanged by the Fed this week, despite mounting inflationary risks stemming from renewed hostilities in the Middle East.