Suspected Japanese intervention and softer US economic data push the dollar lower, lifting the euro to its highest level since mid-June.
The euro surged to 1.1534 against the dollar, its strongest level in six weeks, as the greenback faced broad selling pressure. Weak US economic data and suspected Japanese intervention to prop up the yen weighed on the dollar index, which fell 0.8% to near 100 on Thursday.
US GDP growth slowed to an annualized 1.5% in the second quarter, missing forecasts of 2.1% and down from the first quarter’s 2.1% pace. Core PCE inflation, the Fed’s preferred gauge, rose 0.1% month-over-month in June, below expectations, while annual core inflation eased to 3.3%. Personal income and spending also cooled, signaling a moderating economy.
Traders continue to price in a potential Fed rate hike later this year, though inflation remains above the central bank’s 2% target amid elevated oil prices tied to Middle East tensions.