Dollar Faces Pressure as Suspected Intervention Sends AUD/USD, NZD/USD Soaring
The US dollar faced pressure on Friday as suspected coordinated intervention from Asian foreign exchange authorities sent the AUD/USD and NZD/USD surging to fresh highs. The move came after softer-than-expected US economic data, including a drop in core PCE inflation and disappointing personal income and spending figures.
A strong earnings update from Microsoft and Amazon also contributed to the risk appetite surge that fueled the gains of the Australian and New Zealand dollars. The intervention's effectiveness was amplified by the Fed's decision against raising interest rates on Wednesday, leaving the US dollar vulnerable to further pressure.
The Bank of Japan policy meeting later in the session will be closely watched, with a surprise rate hike possible given the increased risk from recent intervention. A BOJ move would likely lead to sharply lower USD/JPY and potentially broader US dollar weakness.