Yen Intervention Weighs Heavily on US Dollar

The US dollar has continued to weaken in response to coordinated yen intervention efforts. The US Treasury and Japanese Ministry of Finance (MoF) have been working together to buy yen, with a joint operation taking place on Friday. This move is seen as an effort to boost the Japanese economy and put downward pressure on the value of the US dollar.

The effects of this intervention are being felt in currency markets, with the US dollar index (USD) falling below 157 overnight and staying below the 100-mark. The euro has also been boosted by these efforts, with the EUR/USD pair holding above 1.1530. However, it's worth noting that the primary cause of the euro's rally is still JPY interventions.

Meanwhile, the pound sterling (GBP) had a relatively quiet week, closing out at just below 1.35. The Bank of England (BoE) decision on Thursday was overshadowed by FX intervention efforts, with the majority of the MPC stressing the absence of second-round inflation effects and urging markets not to expect a hike in interest rates.

The loonie (CAD) also had a quiet week, despite good economic news. May GDP rose 0.3%, but the stronger growth did little for the BoC anchored by core inflation at five-year lows.