USD Plummets on Fed Split, Aussie Dollar Underperforms After Soft Inflation Reading

The US dollar plummeted to 15-month lows after the Federal Reserve's decision revealed a split among board members. Three Fed officials pushed for a rate hike, but newly appointed Chair Kevin Warsh opposed them. This unexpected division unsettled markets, causing long-term US bond yields to rise.

USD/JPY fell by 0.3% in line with USD weakness across Asia. The Japanese yen gained strength due to wage growth expectations. A labour ministry advisory panel recommended increasing the nationwide average minimum wage by JPY55 per hour this fiscal year, which is a 4.9% increase.

The Australian dollar underperformed after yesterday's inflation reading. Q2 inflation came in softer than expected, reducing the likelihood of any near-term policy tightening. The Aussie dollar weakened, with AUD/USD falling to a two-week low and immediate resistance at 0.6975.