Dollar Plunges to Six-Week Low After Fed's Dovish Surprise and Yen Intervention

The US dollar has plummeted to its lowest level since June after the Federal Reserve's surprise dovish announcement and Japanese yen intervention.

The DXY index, which measures the greenback against a basket of six currencies, briefly dipped below 100.0 on Wednesday, its lowest point since June 17th when Fed Chair Kevin Warsh's first meeting sent the dollar soaring.

This downturn was exacerbated by position-squaring and the largest short positions in USD since 2021 reported by leveraged funds.

The hangover from the dovish Fed surprise combined with Japanese intervention ahead of this morning's Bank of Japan hold has taken the US dollar back to levels seen during Warsh's USD-bullish June press conference.