Dollar Slumps After Yen Intervention as Euro Breaks Out of Range
The US dollar slumped after a suspected yen-buying intervention by Tokyo, which was seen as coordinated with Seoul. The move pushed USDJPY lower from 163 to 158 before retracing modestly. This dynamic is expected to be temporary, and the impact of previous interventions has proven fleeting without an underlying macro catalyst.
The dollar's weakness also weighed on other currencies, including GBP and CAD. The euro, however, broke out of its range, climbing around half a percent to the low-1.15s, driven by domestic data that included flash Q2 GDP doubling expectations at 0.4% QoQ.
The Bank of England held Bank Rate at 3.75%, with a 6-3 split vote that saw Mann joining Pill and Greene in voting to hike. Governor Bailey urged markets not to leave the room 'thinking that the Bank is edging towards a hike', and Deputy Governor Lombardelli described her vote to hold as clear-cut.
Today's calendar includes the Q2 employment cost index at 13:30 BST, followed by Chicago PMI and final UMich sentiment. The key focus will be on the domestic economy, with May GDP due at 13:30 BST, seen up 0.2% MoM after April's 0.5%