Dollar Tumbles on Weak US Growth, Yen Surges Amid Intervention Speculation

The US Dollar declined sharply on Thursday after the US economic growth missed expectations and underlying inflation moderated. The US Dollar Index (DXY) fell around 0.8% and traded near 100.00, below the psychological 100.00 level.

Preliminary US Gross Domestic Product expanded at an annualized rate of 1.5% in the second quarter, below the 2.1% market forecast. Core Personal Consumption Expenditures inflation rose only 0.1% MoM in June, compared with expectations of 0.2%, while the annual rate eased to 3.3% from 3.4%.

The US Dollar's decline was also influenced by a sudden surge in the Japanese Yen (JPY), which fueled speculation that Japanese authorities intervened in the foreign exchange market. The USD/JPY plunged around 2.4% and traded near 159.50 as the Japanese Yen strengthened abruptly across the market.