Forex
Dollar Selloff Accelerates as DXY Falls Below 100.0
The US dollar's post-FOMC selloff accelerated yesterday, according to ING's Francesco Pesole. The Dollar Index (DXY) briefly dipped below 100.0 and returned to levels seen after Kevin Warsh's June press conference.
Net-long USD positioning versus G9 is stretched, with the most net-long USD positioning since January 2025 as of July 21. This suggests that there may be room for further USD long-squeezing, making it difficult to call a bottom in this dollar selloff.
The dovish Fed repricing and disappointing economic data weighed on the dollar. Core PCE rose only 0.1% month-on-month in June, while Q2 growth undershot expectations at 1.5% quarter-on-quarter annualized. JPY intervention also triggered a more than 3% decline in USD/JPY.